Although all potential Ethereum ETF issuers have fulfilled the US SEC’s bid by removing staking from their applications, investors may still prefer ETH in the ETF market.
Mike Novogratz, CEO of Galaxy Digital Holdings Ltd (TSE: GLXY), expressed optimism about the future of staking for the US spot Ethereum ETF product. Despite the current regulatory stance of the U.S. Securities and Exchange Commission (SEC), Novogratz believes that staking for these financial products will become a reality within the next two years.
Mike Novogratz Convinced About Ethereum ETF Staking
In an interview with Consensus 24, the Galaxy Digital CEO shared his views, asserting that if Ethereum ETF products are used without staking for 12 to 24 months, regulators will change the rules to include them. Meanwhile, Bloomberg ETF analyst Eric Balchunas estimates that S-1 approval and Spot Ethereum ETF trading will occur in June or July. So Mike’s prediction would be around mid-2025 or mid-2026.
Novogratz’s prediction comes at a time when the SEC is taking a cautious stance on approving spot cryptocurrency ETFs. However, the landscape is slowly changing as regulatory frameworks evolve and market participants demand more sophisticated financial products.
Undoubtedly, the Hong Kong cryptocurrency market has been picking up steam since the Securities and Futures Commission (SFC) approved a 6-spot Bitcoin (BTC) and Ether ETF in late April. The SFC is currently considering allowing staking for these products. According to reports, the Commission is in talks with cryptocurrency ETF issuers about allowing Ethereum staking through licensing services. This can expand investors’ access to income growth, allowing people to earn income passively.
Notably, regulatory approvals may push Hong Kong ahead of the United States in this respect. It remains to be seen what action the United States will take regarding Ethereum staking.
ETH ETF issuer removes staking from application.
Recall that before the US SEC approved the Ethereum spot ETF, some top companies such as Fidelity Investments updated their S-1 filings to align with the SEC’s requirements and condemned Ethereum staking. Meanwhile, Fox Business reporter Eleanor Terrett reported that spot Bitcoin ETF issuers CoinShares and Valkyrie will not be filing for a spot Ethereum ETF.
The main reason mentioned is the lack of staking feature. The companies believe that without this feature, ETFs lack value for investors. This is especially true in a market that already has eight issuers. However, if approved by the US SEC, it will distinguish between Ethereum, Staked Ethereum (sETH), or staking as a service, and ETH as a security.
Although all potential Ethereum ETF issuers have fulfilled the US SEC’s bid by removing staking from their applications, investors may still prefer ETH in the ETF market. This is because the fundamentals are more technology-centric and are consistent with the evolution of financial systems through smart contracts.
Ethereum’s proof-of-stake (PoS) consensus mechanism is also a big help, as it is generally more environmentally friendly than Bitcoin.
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