In the latest amendments to their applications, issuers aiming to launch spot Ether ETFs have clarified to the United States Securities and Exchange Commission that they will not stake $ETH held by the funds, with the commission expected to decide on the application on May 23 2024.
Staking Ether involves depositing $ETH to help secure the Ethereum blockchain — and earning yield in exchange.
“Neither the trust, nor the sponsor, nor the custodian, nor any other person associated with the trust will, directly or indirectly, engage in action where any portion of the trust’s ETH becomes subject to the Ethereum proof-of-stake validation or is used to earn additional ETH or generate income or other earnings,” said a filing by CBOE, one of the stock exchanges set to host some of the ETFs.
An exchange-traded fund (ETF) is one of the investment products that is traded on a stock exchange. It enables investors to purchase shares that mirror the price of an underlying asset, which can range from gold and foreign currencies to cryptocurrencies and technology stocks.
If approved, a spot Ethereum ETF, similar to a Bitcoin ETF, would involve a fund manager handling the purchase and storage of ETH digital coins, allowing individuals to buy shares that reflect their value. This would provide investors with exposure to the second-largest cryptocurrency by market capitalization.
Although analysts were recently pessimistic about the SEC approving Ethereum funds this spring, there is now a growing consensus that approval could come as early as this week. As a result, the price of ETH and other major cryptocurrencies have been rising.
ETH last 7 DaysSeveral financial firms have submitted S-1 forms to the SEC. These forms notify the regulator of the companies’ intentions to offer securities to the public and include a comprehensive overview of their business operations.
Among the firms with applications under review include:
- Blackrock
- Grayscale
- Ark Invest/21Shares
- Fidelity
- Vaneck
- Hashdex
- Franklin Templeton
- Invesco/Galaxy Digital
- Bitwise
Most of these firms already own Bitcoin ETFs.
The SEC decision deadline for the proposed products varies from end of May to early August 2024. The earliest application first came from Vaneck in 2021, and the firm expects a response the earliest, while most of the applications came in from since the 2nd half of 2023 to early 2024.
“We were first to file and we expect to be first to respond to comments and first out the door. When you filed, used to mean something and it should again (vs SEC allowing everyone out on same day which favors the big firms),” @matthew_sigel of VanEck said in a recent spaces.
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