Analysis: 'ETH spot ETF demand may shrink if staking function is excluded'

IconCryptoNewsTerminal Staff23 May, 2024

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Analysis: 'ETH spot ETF demand may shrink if staking function is excluded'

Ether spot ETF demand could be dented by omission of staking Analysts are suggesting that a key feature being left out of ether spot exchange-traded funds (ETFs) may reduce investor demand for the funds in the long term. According to Bloomberg, Brian Rudick, an analyst at crypto market maker GSR Markets, said, "In their pursuit of an ether spot ETF, Fidelity, Ark Invest, and others have excluded staking from their products. But that could reduce demand for the funds over the long term." Bloomberg explained, "Some investors may ultimately decide that they would rather buy and hold actual ether, which they can then stake themselves, rather than invest in an ETF that doesn't offer staking." Previously, the U.S. Securities and Exchange Commission (SEC) requested 19b-4 (request for review) updates from ether spot ETF filers and exchanges, and multiple filers have since removed references to "staking" in their amendments. Staking is a way for holders of certain cryptocurrencies, such as ether, to earn rewards by locking up their coins in a smart contract. The process helps to validate transactions on the blockchain and secure the network.

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