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SEC’s Peirce Criticizes Approval of Ethereum ETF Staking
Arslan Butt•Friday, July 19, 2024•2 min read
Hester Peirce, one of the SEC Commissioners, is at least amenable to the notion of enabling staking in Ethereum ETFs in the future.
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By locking down Ethereum to contribute to the blockchain’s security, staking earns 4% yearly return in new coins. Issuers such as VanEck and Fidelity had originally planned this functionality, but it was taken out prior to their approval in May.
Commissioner Peirce hinted that if Ethereum ETFs begin trading, the decision to forbid staking would be reevaluated in a recent interview. She added that later on, features omitted from Bitcoin ETFs were also given another look. Peirce did point out that not all of the SEC Commissioners would agree with her viewpoints.
Compared to the Bitcoin ETF approval process, the Ethereum ETF approval process was less traditional. Ethereum ETFs were approved by the SEC’s Trading and Markets division in lieu of a vote by Commissioners. Commissioner Peirce highlighted her dissatisfaction with the convoluted approval procedure, stating that it ought to be simple and drama-free. According to her, goods should just be free to sell so that the market determines their worth.
Even without staking, analysts predict that these ETFs will see high demand. Sean Farrell of Fundstrat forecasts that over the first several months of trading, they may draw in net inflows of more than $5 billion. Next week is when the new Ethereum ETFs are scheduled to go live.
Staking was left out of the original ETF offerings because SEC Chair Gary Gensler had previously declared that it constituted an investment contract. Regarding whether the SEC ordered or willingly removed stakes, Commissioner Peirce remained silent.
In conclusion, although staking will not be required at launch for Ethereum ETFs, it is possible that it will be in the future. Commissioner Peirce’s more accommodating attitude toward bitcoin laws is evident in her willingness to reevaluate staking and other product features after the ETFs start trading.
Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.
His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.
His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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