Ethereum ETF Staking Needs Multi-Month Rally for Impact, Analyst Says

Ethereum ETF staking is unlikely to have a significant impact on the market without a sustained, multi-month rally, according to an analyst. The analyst's perspective is based on the current market conditions and the potential for staking rewards to influence investor behavior. Staking rewards, while attractive, may not be sufficient to drive substantial investment into Ethereum ETFs unless there is a broader market rally that boosts investor confidence and interest in cryptocurrencies.

The analyst's view is supported by the fact that US-based Ethereum ETPs, which command significant assets, have foregone roughly $61 million in potential staking rewards. This suggests that the allure of staking rewards alone is not enough to attract investors, especially in a market that lacks a clear upward trend. The analyst's forecast indicates that a multi-month rally would be necessary to create a more favorable environment for Ethereum ETF staking to have a meaningful impact.

Ask Aime: "Will Ethereum ETF staking drive market rally?"

For inflows to increase again, the analyst said ETH would need a “multimonth run” paired with a “strong narrative.” He added that when Ether’s price surged during a run in December, there was a direct correlation with an increase in inflows. Donald Trump’s election win in November sparked a crypto market rally which saw ETH surge 71% to reach $4,107 on Dec. 16. From Nov. 22, spot Ether ETFs saw a 19-day positive inflow streak, amassing approximately $2.44 billion in inflows. However, since tapping the $4,107 price level, Ether entered a downtrend and has since fallen 56% to trade around $1,809 at the time of publication.

The analyst noted that after the Ether ETFs launched, the price “went down quickly,” making any recovery difficult, unlike spot Bitcoin ETFs, which saw Bitcoin (BTC) hit a new all-time high just two months after they launched in January 2024. “When you launch an ETF, and you have that sort of performance out of the gate, it’s tough,” he said.

US ETF issuers are still waiting for the US Securities and Exchange Commission to allow Ether ETFs to offer staking after filing numerous requests for permission earlier this year. It’s possible they could be approved for staking early, but the final deadline is at the end of October. Potential intermediate deadlines before the final approval (or denial) are in late May and late August.