Cboe BZX Proposes Staking for U.S. Spot ETH ETF

Cboe BZX Exchange has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to incorporate staking into the 21Shares Core Ethereum (ETH) ETF. The move, if approved, would make 21Shares the first U.S. spot ETH ETF to offer staking rewards.

The proposed rule change, filed under Form 19b-4, seeks to allocate a portion of the ETF's Ethereum holdings for staking, allowing investors to earn passive income while helping secure the blockchain. Cboe BZX plans to use a "point-and-click" staking method to minimize the risk of theft.

Staking involves locking up Ethereum to help secure the blockchain and generate additional returns. The SEC has historically been cautious about staking in ETFs due to potential securities law violations. However, recent shifts in leadership at the SEC have renewed investor optimism that the regulator may reconsider its stance on staking in ETF products.

The SEC now has 240 days to issue a decision on the proposal. Market reactions have been positive, with Ethereum recovering from a recent dip following the announcement. The cryptocurrency traded as low as $2,551.17 in the past 24 hours but climbed to $2,794.86, reflecting a 4.73% increase.

The integration of staking into Ethereum ETFs could drive increased institutional interest and investment in Ethereum. Analysts speculate that if approved, this change could strengthen Ethereum’s long-term investment case and potentially drive a rally toward $10,000 in the future.

The SEC’s decision on this proposal will be closely monitored, as it could set a precedent for other ETF issuers looking to integrate staking into their offerings.