NYSE Proposes Ethereum (ETH) ETF with Staking Rewards

The New York Stock Exchange (NYSE) has proposed amendments that will create staking rewards on an Ethereum-based exchange-traded fund (ETF).

The New York Stock Exchange (NYSE) is considering a proposal to introduce exchange-traded funds (ETFs) with staking capabilities on an Ethereum (ETH)-based ETF.

The proposal, filed by Bitwise Asset Management, aims to list and trade shares of the Bitwise Ethereum ETF with staking on the NYSE. The ETF will provide an opportunity for investors to obtain staking rewards without directly owning crypto.

In its filing with the U.S. Securities and Exchange Commission (SEC), Bitwise seeks approval to launch an Ethereum ETF that includes staking.

The proposal attempts to amend NYSE rules to permit the listing and trading shares of the Bitwise Ethereum Trust on the exchange.

The ETF will track the price of Ether, providing investors with a convenient way to invest in the cryptocurrency without the complexities of setting up a cryptocurrency wallet.

Highlighting the significance of staking, the proposal mentions that it's mainly accessible to those who hold and manage digital assets.

Introducing this capability within an ETF would offer another channel for investors to gain exposure to crypto-related products in a regulated financial instrument.

The amendment proposal also mentions that the ETF's shares will be issued and fully paid at an initial price of $20 per share.

Moreover, the proposal outlines the procedures for calculating the market-opening and market-closing prices of the ETF shares.

The SEC will review Bitwise's application and decide whether to approve it.

Earlier this year, seven companies, including Bitwise, dropped their applications for spot Bitcoin ETFs after the regulator delayed its decision.

The agency has expressed concerns over cryptocurrency financial products in relation to investors, fraud, and stability of the market.

Authorities will focus on how the proceeds from staking in the ETF will be set up, arrangements of the properties’ custody, and distribution plans.

More so, the SEC will access whether the creation of an ETF with staking in an optimal format poses new risks in the financial market.

While the proposal could expand investment options, approval is not guaranteed.

Earlier this year, the SEC approved several futures-based Bitcoin ETFs, providing a limited form of access to cryptocurrency investments for U.S. retail investors.

However, applications for spot Bitcoin ETFs were rejected, with the SEC citing concerns over market manipulation and the ability to safeguard investors' funds.

In a recent speech at the Digital Asset Summit, Robbie Mitchnick, head of digital assets at BlackRock (NYSE:BLK), discussed the challenges and opportunities of incorporating staking into Ethereum ETFs.

Mitchnick highlighted the tremendous success of the iShares Ethereum 600 Total Return ETF, which began trading in November.

However, he noted the absence of staking as a key drawback.

Mitch닉스 said that in the Ethereum ecosystem, staking yields are a crucial component of generating investment returns.

Even though staking was left out of the initial ETF launch, Mitchnick said adding it could boost investor engagement.

“We can’t lose sight of the fact that this is an iteration in a broader journey. We’re still early in the integration of crypto into the mainstream investing landscape,” Mitchnick said.

Despite the potential benefits, Mitchnick acknowledged that incorporating staking into Ethereum ETFs presents regulatory and structural challenges.

He noted that the process is complex and requires more than just regulatory approval.

Mitchnick's remarks highlight the ongoing discussion and experimentation as the cryptocurrency industry seeks to expand its offerings and reach new investors.