Grayscale Investments plans to add staking to its proposed spot ethereum ETF, following a similar move from Fidelity Investments earlier this week.
Grayscale Investments says that having the ability to stake ether would allow the fund to mitigate inflationary pressures and preserve value for shareholders.
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Posted March 20, 2024 at 12:36 am EST.
Grayscale Investments has included a provision to stake ether in its application for a spot ethereum exchange-traded fund (ETF).
In a preliminary proxy statement filed on Tuesday, Grayscale put forth four proposals in a consent solicitation statement for its proposed Grayscale Ethereum Trust (ETHE) – a close-ended ether fund that it intends to convert into an ETF if approved.
One of the four proposed items included the ability for the fund to stake ether through the trust in a Proof-of-Stake validation protocol.
“We hope you share our view that these amendments both modernize and simplify ETHE Shares for the ultimate benefit of current and future ETHE shareholders,” wrote Grayscale CEO Michael Sonnenshein.
The provision follows a similar one filed by Fidelity Investments in its own application for a spot ether ETF, which the firm amended on Monday.
Meanwhile, the outlook for a spot ether ETF being approved has started to look less promising, with Bloomberg ETF analysts now predicting that the U.S. Securities and Exchange Commission (SEC) will likely reject all applications in the pipeline.
“We haven’t seen signs of SEC engagement with the issuers on this topic and we would have expected to see more substantial signs of interactions between the SEC and these issuers by now if the SEC were planning to approve,” Bloomberg ETF analyst James Seyffart said in an email to Unchained.
The overwhelming demand for spot bitcoin ETFs following their approval aided bitcoin’s push towards a new all-time high, and it is fair to assume that the price of ether might follow a similar trajectory if spot ether ETFs were to be approved. However, the SEC’s stance on the status of ether as an asset is markedly different from its view on bitcoin.
SEC Chairman Gary Gensler has stated on a number of occasions that bitcoin is the only digital asset that can be considered a commodity, and “everything other than bitcoin” could be classified as a security.
In April, Gensler avoided giving a direct response to a question from House Financial Services Committee Chair Patrick McHenry on whether Ethereum was a security or a commodity.
