The Cboe BZX Exchange is seeking SEC approval to introduce staking for the 21Shares Core Ethereum exchange-traded fund.
In a recent filling submitted as a Form 19b-4, Cboe BZX has requested SEC approval for the Ethereum (ETH) held within the fund to be staked. This is first time an ETF in the U.S. has proposed staking. If approved, this would allow investors to earn rewards by staking their ether, which is something not currently possible in Ethereum ETFs.
Staking involves locking up ETH to help secure the Ethereum network while earning passive income in the process. Staking could open up new opportunities for investors to earn extra returns compared to just holding ETH ETFs. Cboe BZX plans to use a “point-and-click” method for staking, meaning the ETH won’t be moved, lowering the risk of theft during the staking process.
Despite being certified last year, the 21Shares Core Ethereum ETF did not allow for staking. The SEC has been hesitant to allow staking in ETFs because of worries that it would violate securities laws. However, leadership changes within the SEC have renewed investors’ confidence that the regulator might finally consider staking in ETF products.
SEC Commissioner Hester Peirce has been advocating for regulatory changes that would allow Ethereum ETFs to include staking. Bloomberg ETF analyst James Seyffart expressed optimism about the filing’s chances, saying he believes it will likely be approved. He remains cautious given the uncertainty that surrounds regulatory decisions.
This news caused Ethereum’s price to rise by nearly 6% shortly after the announcement. The SEC now has 240 days to decide on the request. If approved, the change could encourage more investment in Ethereum ETFs and help strengthen the case for Ethereum as a long-term investment.
