Ether exchange-traded funds (ETFs) in the United States may be able to start staking a portion of their tokens as soon as May, according to Bloomberg Intelligence analyst James Seyffart.
On April 9, the US Securities and Exchange Commission (SEC) authorized exchanges to begin listing options contracts tied to spot Ether (ETH) ETFs after greenlighting Bitcoin (BTC) ETF options in September. However, issuers are still waiting for the regulator to allow Ether ETFs to offer staking after filing numerous requests for permission earlier this year.
Source: James Seyffart
The approval of options contracts could represent a key step toward regulatory approval for staking services in the United States. Bloomberg Intelligence analyst James Seyffart said on April 9 that clearance for staking on ETH funds could come as early as May but would likely take until the end of 2025.
“It’s possible they could be approved for staking early, but the final deadline is at the end of October,” Seyffart said in a post on the X platform. “Potential intermediate deadlines before the final approval (or denial) are in late May & late August.”
Options are financial derivatives that give investors the right, but not the obligation, to buy or sell an asset at a predetermined price before a certain date. Staking, on the other hand, involves locking up a cryptocurrency, like ETH, to support network operations — such as validating transactions — in exchange for rewards.
In ETH funds, options contracts allow investors to hedge or speculate on the tokens’ prices, while staking offers a way to earn rewards by participating in Ethereum’s proof-of-stake network.
Ether ETF inflows. Source: Farside Investors
Related: SEC approves options on spot Ether ETFs
Progress toward adoption
Ether ETFs launched in June 2024 but struggled to attract significant investor interest. According to data from Farside Investors, the funds have seen net inflows of $2.4 billion as of April 10, compared to $35 billion for Bitcoin ETFs introduced in January. Analysts say the SEC’s approval of Ether ETF options could help spur adoption.
Asset managers are also waiting on the SEC to greenlight requests to allow in-kind creations and redemptions for Bitcoin and Ether ETFs.
The emergence of options markets tied to spot crypto ETFs is a “monumental advancement” in crypto markets and creates “extremely compelling opportunities” for investors,” Jeff Park, Bitwise Invest’s head of alpha strategies, said in a Sept. 20 X post.
But staking could be the most significant step forward for Ether funds.
In March, Robbie Mitchnick, BlackRock’s head of digital assets, said Ether ETFs are “less perfect” without staking. “A staking yield is a meaningful part of how you can generate investment return in this space.”
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