SEC Approves Ether ETF Options, Staking May Follow by May

Ether exchange-traded funds (ETFs) in the United States may soon be able to start staking a portion of their tokens as early as May, according to an analyst. On April 9, the US Securities and Exchange Commission (SEC) authorized exchanges to begin listing options contracts tied to spot Ether (ETH) ETFs. This move follows the greenlighting of Bitcoin (BTC) ETF options in September. However, issuers are still awaiting regulatory approval to allow Ether ETFs to offer staking services, despite numerous requests filed earlier this year.

The approval of options contracts is seen as a crucial step toward regulatory approval for staking services. An analyst predicted that clearance for staking on ETH funds could come as early as May but would likely take until the end of October. The analyst also mentioned potential intermediate deadlines for approval or denial in late May and late August. Options contracts give investors the right, but not the obligation, to buy or sell an asset at a predetermined price before a certain date. In contrast, staking involves locking up a cryptocurrency, like ETH, to support network operations in exchange for rewards.

In ETH funds, options contracts allow investors to hedge or speculate on the tokens' prices, while staking offers a way to earn rewards by participating in Ethereum’s proof-of-stake network. The approval of options contracts could help spur adoption of Ether ETFs, which launched in June 2024 but have struggled to attract significant investor interest. According to data, the funds have seen net inflows of $2.4 billion as of April 10, compared to $35 billion for Bitcoin ETFs introduced in January. Analysts believe the SEC’s approval of Ether ETF options could help boost adoption.

Asset managers are also awaiting the SEC to greenlight requests to allow in-kind creations and redemptions for Bitcoin and Ether ETFs. The emergence of options markets tied to spot crypto ETFs is seen as a significant advancement in crypto markets, creating compelling opportunities for investors. However, staking could be the most significant step forward for Ether funds. In March, an executive from BlackRock stated that Ether ETFs are “less perfect” without staking, highlighting the importance of a staking yield in generating investment returns in this space.