SEC decision day on spot Ethereum ETFs has arrived. The SEC will announce its decision on VanECck's ETH ETF application today.
While the increased possibility of ETF approval revitalizes the market, issuer companies are making some updates to their Ethereum ETF applications and removing the staking feature due to regulatory concerns.
However, analysts think this decision, driven by regulatory concerns, could reduce the attractiveness of ETFs compared to direct ETH investments that offer staking rewards.
Stating that staking is an important mechanism for Ethereum and other proof-of-stake blockchains, analysts said that investors who receive rewards for staking may find direct Ethereum investment instead of ETF more profitable.
Speaking to Bloomberg, GSR senior analyst Brian Rudick said that due to the waiver of staking rewards in ETFs, investors may prefer to buy ETH directly from the crypto market.
“Since spot Ethereum ETFs cannot offer staking rewards, investors may prefer to purchase ETH directly.
This choice could significantly impact the ETF market and its potential growth.”
MNNC Group COO Ayesha Kiani stated that the staking feature currently causes ETH to be seen more as a security.
Hashnote founder Leo Mizuhara expressed centralization concerns for Ethereum. At this point, Mizuhara stated that the staking feature in ETFs could lead to the centralization of ETH and stated that centralization could destabilize the Ethereum protocol.
“Therefore, not staking in ETFs may be beneficial to the stability of Ethereum. This decision is in line with Ethereum's goals of maintaining a decentralized financial system that is not dependent on a few intermediaries.”
*This is not investment advice.