Latest updates on ETH ETF approval
Key Points
- It seems likely that spot ETH ETFs were approved by the SEC in May 2024, with trading starting in July 2024.
- Research suggests these ETFs have seen significant inflows, with predictions of growth in 2025.
- The evidence leans toward ongoing efforts to allow staking in ETH ETFs, with the SEC reviewing proposals as of March 2025.
Approval and Trading
The U.S. Securities and Exchange Commission (SEC) approved spot Ether (ETH) exchange-traded funds (ETFs) in May 2024, a major step for cryptocurrency integration into mainstream finance. Trading for these ETFs began in July 2024, providing investors with a regulated way to gain exposure to Ethereum without directly holding the cryptocurrency.
Performance and Growth
Since their launch, ETH ETFs have experienced significant inflows, with reports indicating strong investor interest. Analysts predict continued growth in 2025, driven by institutional adoption and market trends, potentially boosting Ethereum's price and market stability.
Staking Proposals
An unexpected development is the recent push to allow staking in ETH ETFs. Exchanges like Cboe and NYSE have proposed enabling staking, which could allow ETFs to earn additional returns by locking up ETH. The SEC is currently reviewing these proposals, with decisions possibly extending into May 2025, adding a layer of potential future benefits for investors.
Survey Note: Comprehensive Analysis of ETH ETF Approvals and Developments
This note provides a detailed examination of the latest updates on ETH ETF approvals, covering regulatory milestones, market performance, and emerging trends as of March 10, 2025. The analysis is grounded in recent reports and expert insights, offering a thorough understanding for investors and enthusiasts.
Background and Initial Approval
The journey toward ETH ETF approval began with significant regulatory scrutiny. The SEC approved spot ETH ETFs on May 23, 2024, following a similar approval for Bitcoin ETFs earlier that year. This decision, detailed in a report by CNBC, marked a milestone, allowing exchanges like Nasdaq, CBOE, and NYSE to list these funds. Trading commenced on July 23, 2024, as noted by Investopedia, enabling investors to buy and hold ETH through regulated financial products.
The approval process was less contentious than Bitcoin's, with the SEC combining proposals from major exchanges, as reported by Forbes. This move was seen as a signal of growing acceptance of cryptocurrencies in traditional finance, with ETH ETFs expected to attract both retail and institutional investors.
Market Performance and Inflows
Since their launch, ETH ETFs have shown robust performance. Reports from December 2024, such as an article on Cointelegraph, highlighted record inflows of $2.1 billion in December, nearly doubling the previous month's figures despite holiday slumps. Analysts, including Nate Geraci from The ETF Store, predicted in an X post (@thekhuongxda) that inflows could outpace gold ETFs, driven by strong ETH price performance.
Price predictions for 2025 are optimistic, with sources like InvestingHaven forecasting ETH reaching highs of $11,411, fueled by ETF-related liquidity and institutional buying. This growth is seen as part of a broader trend, with ETH ETFs contributing to market stability, as noted in Changelly reports from March 2025.
Staking Proposals: A New Frontier
A significant development in early 2025 is the push to include staking in ETH ETFs. Staking, integral to Ethereum's proof-of-stake mechanism, involves locking up ETH to validate transactions and earn rewards. Initially, the SEC prohibited staking in ETF filings, citing securities law concerns, as detailed in a Morningstar article from July 2024. This decision was based on the Howey Test, with staking seen as potentially resembling an investment contract.
However, recent proposals have reignited the debate. On February 13, 2025, Cboe BZX Exchange filed a proposal to allow staking in the 21Shares Core Ethereum ETF, acknowledged by the SEC on February 20, 2025, according to CCN.com. Similarly, NYSE proposed staking for Grayscale's ETH ETFs, as reported by Cointelegraph on February 20, 2025. These proposals aim to use "point-and-click staking," reducing risks by keeping ETH in custody wallets, addressing SEC concerns about security and regulatory compliance.
The SEC's review process, with a potential decision deadline in May 2025, is ongoing, as mentioned in CryptoNews. If approved, staking could enhance ETF returns, with estimated rewards of 2-4% annually, potentially attracting more investors. This development is seen as a response to market demand and a shift in regulatory attitudes under the Trump administration, which has shown a more pro-crypto stance, as noted in TokenPost.
Regulatory and Market Implications
The inclusion of staking could have broader implications for ETH ETFs. It might increase their appeal compared to direct ETH holdings, where investors can already stake for yields, as highlighted in a Fireblocks blog from December 2024. However, it also raises questions about network security and decentralization, with over 32 million ETH currently staked, representing 27% of the total supply, according to Blockworks.
The SEC's cautious approach reflects past enforcement actions against Coinbase and Kraken for staking services, viewing them as unregistered securities, as reported in Cryptoslate. This controversy underscores the regulatory uncertainty, with analysts like Brian Rudick from GSR noting an "immediate opportunity cost" for ETFs without staking, as per Cointelegraph from May 2024.
Data and Trends
To illustrate the performance and potential of ETH ETFs, consider the following table based on recent reports:
Metric | Value as of March 2025 | Source |
|---|---|---|
Net Assets (U.S. Spot ETH ETFs) | $112.59 billion | |
December 2024 Inflows | $2.1 billion | |
Estimated Staking Reward | 2-4% annually | |
2025 Price Prediction Range | $2,200 - $11,411 |
This table highlights the scale of assets, recent inflows, and potential returns, providing a snapshot for investors.
Conclusion
As of March 10, 2025, ETH ETFs are well-established, with strong market performance and growing institutional interest. The ongoing review of staking proposals represents a potential expansion, offering investors additional returns and enhancing ETF competitiveness. However, the outcome remains uncertain, with regulatory decisions pending, reflecting the dynamic nature of cryptocurrency regulation.
Key Citations
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