SEC delays staking decision for Grayscale ETH ETFs

The United States Securities and Exchange Commission (SEC) has delayed a decision on whether to approve Ether staking in two Grayscale funds.

The decision on Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF has been postponed until June 1, according to an April 14 announcement from the SEC. The deadline for a decision is the end of October.

On Feb. 14, the New York Stock Exchange (NYSE) filed a proposed rule change on behalf of Grayscale that would permit investors in the company’s Ether (ETH) ETFs to stake their holdings.

Staking is the process of locking up cryptocurrency in a wallet to support the operations and security of a blockchain network, offering stakers rewards in return. The feature is considered a potentially integral part of Ether ETFs, as it could generate yield to investors, increasing the attractiveness of the funds.

SEC’s announcement of the delay. Source: SEC

Annual yield on staked Ether is estimated at 2.4% on Coinbase, while on Kraken, another US-based exchange, it ranges from 2% to 7%. According to Sosovalue, Ether ETFs have had a cumulative net inflow of $2.28 billion since their launch in 2024.

The race for staking on Ether ETFs includes other asset managers, including BlackRock's 21Shares iShares Ethereum Trust. The company sought permission to offer staking services in February and is currently waiting for the agency approval.

Despite the delay on staking filings, the SEC is moving forward with regulatory requests surrounding crypto ETFs.

On April 9, the agency approved options trading for multiple spot Ether ETFs, allowing the derivates feature on funds from BlackRock, Bitwise and Grayscale's ETFs.

Options trading involves the right to buy and sell contracts that give the investors the right but not the obligation to buy an asset at a certain price. The approval broadens the funds utility for institutional investors.

The efforts to expand the appeal of Ether ETFs reflect the lack of adoption in contrast with Bitcoin (BTC) ETFs launched in January 2024. While the Ether ETFs amassed a net cumulative inflow of $2.2 billion as of April 11, Bitcoin funds flows topped $35.4 billion, according to Sosovalue.

Ether has also had a rough time during this bull market compared to other assets like XRP (XRP) and Solana (SOL). The asset’s 52-week high of $4,112 did not surpass its November 2021 peak all-time-high value of $4,866. The token is trading below the $2,000 mark on April 14.

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