In an official Form 19b-4 filing, Cboe BZX has asked the U.S. Securities and Exchange Commission (SEC) for approval to permit staking for the 21Shares Core Ethereum ETF. Staking, an approach that allows investors to profit by locking up Ethereum (ETH) holdings, was the first to be recommended by a U.S.-based ETF.
Even after gaining approval last year, the 21Shares Core Ethereum ETF lacked staking capabilities. The SEC has been reluctant to allow staking in ETFs due to concerns of violating securities laws. Investors hope with the change in regulatory leadership the SEC will be more open to staking-based ETFs.
According to the filing, Cboe BZX aims to modify parts of the ETH ETP Amendment No. 2 to incorporate staking provisions following discussions with the ETF sponsor.
The exchange intends to use a “point-and-click” staking method, ensuring that ETH remains secure without being transferred, thus mitigating the risk of theft. If approved, this could be an income stream for investors.
Ethereum’s price surges following announcement
The filing announcement immediately impacted the cryptocurrency market, as Ether’s price increased by around 6% in just 30 minutes.
Before a slight decline, ETH had risen to $2,782 at the time of publication. According to market data, Ethereum (ETH) has continued to rise. At the time of writing it was trading at $2,666, up 0.21% over the previous day.
Ethereum’s market cap is also up reinforcing strong interest in the asset. ETH dropped then bounced back and is stabilizing. Analysts think it’s because of growing confidence in regulatory progress that will make Ethereum more useful in financial markets.
As anticipation for the SEC’s ruling increases, investors remain optimistic about the potential outcomes of staking-enabled ETFs. If accepted, this measure might establish an example for future blockchain-based financial products, further bridging the gap between traditional finance and decentralized assets.
