- Bitwise has filed to launch an Ethereum ETF with staking through a proposed NYSE rule change.
- The ETF would let investors earn staking rewards without holding Ethereum directly.
- The SEC will review the proposal and assess risks tied to staking in a regulated fund structure.
The New York Stock Exchange (NYSE) has filed a proposal to allow staking rewards on an Ethereum-based exchange-traded fund (ETF). The move comes through a filing by Bitwise, seeking regulatory approval for the Bitwise Ethereum ETF. The proposal aims to let investors earn staking rewards without holding cryptocurrency directly.
ETF with Built-In Staking
The proposed ETF would integrate Ethereum staking. The regulated financial product would enable investors to access rewards earned from staking activities. The validation process for blockchain transactions requires locking Ethereum funds to both protect transactions and earn bonuses.
Only users who operate their digital assets directly can access traditional staking methods. The ETF structure would change that by offering exposure through a traditional investment vehicle.
Bitwise submitted the proposal under the SEC’s 19b-4 rule change process. This step is necessary to amend NYSE rules and allow the trading of ETF shares with staking features. The product would be a first in the U.S. if approved.
Regulatory Scrutiny Likely
The U.S. Securities and Exchange Commission will now review the proposal in detail. The agency will evaluate the risks involved in bringing staking into an ETF format. It will also examine how staking rewards are distributed, how assets are secured, and the overall investor impact.
The SEC has previously raised concerns about crypto products related to fraud, asset custody, and market stability. It remains uncertain how quickly or favorably the SEC will respond to the new request.
Industry Leaders Weigh In
Other firms have acknowledged the importance of staking in Ethereum’s investment value. While some Ethereum ETFs have launched without staking, analysts note the absence affects investor returns. Including staking could boost participation by offering yield-generating potential in a regulated format.
Bitwise’s existing products include ETFs that track companies holding large amounts of Bitcoin. This Ethereum ETF with staking continues their strategy of creating crypto-linked financial tools. If approved, it would pave the way for other funds with similar features.
The approval of such a product could mark a shift in crypto ETF offerings in the U.S. It may also prompt increased institutional interest in Ethereum. The SEC’s decision will determine whether the proposed structure meets current standards.