The Future of Ethereum ETFs and Staking
The listing of spot Ethereum ETFs in the US recently had me thinking about the future of crypto investments. While these ETFs enjoyed a solid start, pulling in nearly $800 million within just two days, I believe they are missing a crucial piece of the puzzle: staking.
Staking is a component of Ethereum that allows users to earn a return for locking up their Ether which helps in securing the network.
One way of describing it might be something like earning interest on crypto savings. Unfortunately, regulators didn't allow these ETFs to include staking, possibly viewing staked ETFs as unregistered securities. However, I'm optimistic that this stance may change with a new administration possibly taking office next year.
While others, like BlackRock, didn't even try to put staking into the first applications, Fidelity and Franklin Templeton did. That proves interest from asset managers to have this feature is at least there. In fact, Franklin Templeton took a pragmatic approach: it went to market without staking to get its foot in the door but is ready to evolve if the regulatory landscape evolves.
Staking is essential to the Ethereum network; it's therefore necessary to share this with investors via ETFs, just like they would be part of if they were holding Ethereum directly. Although these ETFs have been launched without staking, their coming into existence is a move in the right direction for crypto adoption, as this will make Ethereum accessible to traditional investors who might be gun-shy about holding crypto directly.
However, if they really need to accurately preserve the Ethereum experience, these ETFs will need to introduce staking in the future. The asset managers are ready and willing to offer staking, but they are simply waiting on the regulatory green light.
More comprehensive crypto regulations most likely need to be effectuated before staking can occur within ETFs, although I have no doubt that it is just a matter of time.
Posted Using InLeo Alpha