The asset management company, Fidelity, filed an amendment with the SEC, the US securities regulator, on its proposed ETF for ETH. This document eliminates the exposure that it intended to have of part of its assets to staking, which has changed the expectations of these instruments.
According to exchange-traded fund analyst Eric Balchunas, this move suggests that the SEC will approve Ethereum ETFs without exposure to staking . In this sense, such instruments would only track the price volatility of ETH but will not provide additional returns.
Alex Thorn, head of research at Galaxy Digital, an asset management company that is also seeking to launch an Ethereum ETF, said that this scenario could mean that the SEC attempts to classify staking ETH as a security, while the cryptocurrency itself not alone, which would allow the approval of ETFs.
“That would be consistent with their various court cases, as well as reports on their various investigations, and would perhaps allow the SEC to approve Ethereum ETFs while maintaining their previously expressed opinions/arguments,” added the Galaxy Research executive.
Precisely, almost a year ago, the SEC accused the Coinbase exchange in a lawsuit for allegedly offering unregistered securities through its staking service .
In this case, Thorn indicated that it is “hopeful that the SEC will prohibit ETFs from staking the ETH they own.” He contrasted that this differs from exchange-traded funds in Europe that allow this activity.
Staked Ethereum ETFs had attractive potential for investors
It is worth mentioning that staking is the act of leaving cryptocurrencies deposited for a certain period, in a smart contract in exchange for rewards. This activity can be carried out both on Ethereum and other networks.
In this sense, the staking exposure of the Ethereum ETF proposals was one of the main differentials of those of bitcoin (BTC), products that were approved in the United States at the beginning of 2024. That is why, the elimination of this factor, could imply less attraction for investors.
However, for now, growing expectations for approval of Ethereum ETFs, ahead of the May 23 deadline for a verdict on a proposal, have motivated the market.
In the last 24 hours, the price of ETH saw a rise of more than 20% to $3,700 , its highest in two months. Given this, projections of a recovery in the coming months of its historical maximum recorded more than two years ago, which was almost USD 4,900, have grown.
