ETH Spot ETF Lags Behind: Lack of Staking Rewards Draws Concerns

IconCryptoNewsTerminal Staff23 May, 2024

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ETH Spot ETF Lags Behind: Lack of Staking Rewards Draws Concerns

Samson Mow, the former advisor to El Salvador on Bitcoin adoption and CEO of Bitcoin technology firm Jan3, recently highlighted the potential underperformance of a spot Ethereum (ETH) ETF compared to a Bitcoin ETF. According to Mow, an ETH spot ETF would not offer staking rewards, which could limit its attractiveness to investors. Mow's comments came after the U.S. Securities and Exchange Commission (SEC) requested updates to 19b-4 (request for review) filings from Ethereum spot ETF applicants and exchanges, leading to the removal of references to "staking" in subsequent amendments. The lack of staking rewards in a spot ETH ETF could potentially make it less appealing to investors seeking yield-generating assets. Staking allows ETH holders to earn rewards by helping to secure the Ethereum network, and the absence of this feature in an ETF would mean investors would miss out on a potential source of income. Mow's observations emphasize the importance of considering the full range of features and benefits when evaluating investment opportunities. While spot ETFs provide exposure to the underlying asset, they may not offer the same yield-generating potential as other investment vehicles.

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