On March 20, the New York Stock Exchange (NYSE) proposed to the US Securities and Exchange Commission (SEC) to permit the Bitwise Ethereum exchange-traded fund (ETF) to stake ETH held by the Trust.
The amendment, if approved, would allow Bitwise Ethereum ETF to offer staking rewards.
On March 11, the Cboe BZX Exchange had filed a similar proposal to let Fidelity stake the ETH held by its ETF.
Staking is a process in which Ethereum users lock up a certain number of ETH tokens — a minimum of 32 ETH — to support the network. In return for securing the Ethereum network, users receive staking rewards.
NYSE's proposal mentioned point-and-click staking as the preferred method for the fund. It involves an entity simply initiating staking by pointing and clicking on the ETH tokens it holds. This way, the staked ETH doesn't leave the wallet which reduces the risk of theft, as per the filing.
January 2024 saw the launch of 11 spot Bitcoin ETFs, followed by the launch of nine spot Ethereum ETFs in July 2024.
Wall Street giants, including BlackRock, Fidelity, and Bitwise, jumped in to offer these financial products that give traders exposure to crypto without them having to engage with digital assets directly.
However, Ethereum ETFs did not see any spectacular success, unlike Bitcoin ETFs.
Speaking at the Digital Asset Summit in New York City on March 20, BlackRock's head of digital assets, Robert Mitchnick, said that the lack of staking rewards has held Ethereum ETFs back. If the new administration allows staking, it could be a 'huge step change' for these ETFs.
Ethereum is the second largest cryptocurrency with a market capitalization of $237 billion. It was trading at $1,974.20 at press time, as per Kraken's price feeds .
