Thursday, 30 May 2024
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CryptoEthereum

Ethereum ETF proposal: Ark Invest eliminated the staking option

  • Staking options have been removed from Ark Invest and 21shares’ amended proposal for a spot Ethereum ETF.
  • This tactical move away from staking elements may be in line with regulatory viewpoints.
  • The decision of Ark Invest and 21shares to forbid staking may have an impact on the strategy of other funds.

Staking options have been removed from Ark Invest and 21shares’ amended proposal for a spot Ethereum ETF. Their previous filings suggested enlisting reputable staking providers to oversee a portion of the trust’s assets; this action marks a substantial divergence from such suggestions.

The original idea, spearheaded by investor Cathie Wood, described how the trust could participate in staking and use assets to leverage rewards to support network operations.

ETF proposal

This tactical move away from staking elements may be in line with regulatory viewpoints. Staking was originally incorporated into the framework of an ETF by Fidelity’s ETH-based ETF, which established a precedent for the ETF industry.

The decision of Ark Invest and 21shares to forbid staking may have an impact on the strategy of other funds in light of changing laws and market dynamics.

Lead ETF analyst at Bloomberg, Eric Balchunas called the change possibly a “hail mary.” There haven’t been any comments, despite the impression that this is them polishing their documents in response to SEC feedback, which is excellent news. It is therefore likely a Hail Mary or an attempt to give the SEC one fewer item to reject.

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