Latest news with #GrayscaleEthereumTrustETF
Yahoo
28-04-2025
- Business
- Yahoo
Grayscale Seeks SEC Approval for Ethereum Staking
Grayscale Investments, which manages the Grayscale Ethereum Trust ETF (ETHE) and the Grayscale Ethereum Mini Trust ETF (ETH), has formally approached the Securities and Exchange Commission to allow Ethereum staking capabilities in its exchange-traded products, according to documents submitted to the regulator in April. The asset manager, whose ETHE and ETH represent nearly 50% of all Ethereum assets in U.S. ETPs, argues that current restrictions put American investors at a disadvantage compared to international markets where staking is permitted. Staking is a function of the Ethereum protocol that allows holders to participate in validating transactions on the network. In its presentation to the SEC's Crypto Task Force, Grayscale outlined how U.S. Ethereum ETPs have foregone approximately $61 million in potential staking rewards since their launch through February 2025. If the prohibition continues, Grayscale projects ETPs could miss out on $5.5 billion in staking benefits over the next decade when factoring in daily compounding. At the heart of Grayscale's proposal is addressing a key technical challenge: the time mismatch between ETF redemptions and Ethereum's unstaking process. While ETF share redemptions typically settle in one business day, unstaking Ethereum can take approximately 10 days under normal conditions. This creates a potential liquidity hurdle for ETPs that want to both maximize staking rewards and maintain sufficient assets for redemptions. "ETH does not leave the Trust's wallet at the Custodian during this process; however, staked ETH is not transferable until it becomes unstaked," Grayscale explains in its presentation. To solve this, Grayscale proposes maintaining a "Liquidity Sleeve" of unstaked Ethereum to handle redemptions, along with potential short-term financing arrangements with custodians and liquidity providers. The company also suggests a revolving credit facility as a backstop for extreme scenarios. Data analysis presented by Grayscale indicates that ETH ETP redemptions have generally been moderate, with the largest funds experiencing a maximum 10-day drawdown of 6.7% and an average redemption size under 3% of fund assets. The company notes that European ETPs that offer staking have demonstrated "their ability to stake and efficiently track NAV, with tight spreads and a functional creation-redemption arbitrage mechanism," suggesting the model can work effectively in regulated products. NYSE Arca has already submitted an amended Form 19b-4 application requesting the rule change that would permit staking in Grayscale's Ethereum | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
28-04-2025
- Business
- Yahoo
Grayscale Seeks SEC Approval for Ethereum Staking
Grayscale Investments, which manages the Grayscale Ethereum Trust ETF (ETHE) and the Grayscale Ethereum Mini Trust ETF (ETH), has formally approached the Securities and Exchange Commission to allow Ethereum staking capabilities in its exchange-traded products, according to documents submitted to the regulator in April. The asset manager, whose ETHE and ETH represent nearly 50% of all Ethereum assets in U.S. ETPs, argues that current restrictions put American investors at a disadvantage compared to international markets where staking is permitted. Staking is a function of the Ethereum protocol that allows holders to participate in validating transactions on the network. In its presentation to the SEC's Crypto Task Force, Grayscale outlined how U.S. Ethereum ETPs have foregone approximately $61 million in potential staking rewards since their launch through February 2025. If the prohibition continues, Grayscale projects ETPs could miss out on $5.5 billion in staking benefits over the next decade when factoring in daily compounding. At the heart of Grayscale's proposal is addressing a key technical challenge: the time mismatch between ETF redemptions and Ethereum's unstaking process. While ETF share redemptions typically settle in one business day, unstaking Ethereum can take approximately 10 days under normal conditions. This creates a potential liquidity hurdle for ETPs that want to both maximize staking rewards and maintain sufficient assets for redemptions. "ETH does not leave the Trust's wallet at the Custodian during this process; however, staked ETH is not transferable until it becomes unstaked," Grayscale explains in its presentation. To solve this, Grayscale proposes maintaining a "Liquidity Sleeve" of unstaked Ethereum to handle redemptions, along with potential short-term financing arrangements with custodians and liquidity providers. The company also suggests a revolving credit facility as a backstop for extreme scenarios. Data analysis presented by Grayscale indicates that ETH ETP redemptions have generally been moderate, with the largest funds experiencing a maximum 10-day drawdown of 6.7% and an average redemption size under 3% of fund assets. The company notes that European ETPs that offer staking have demonstrated "their ability to stake and efficiently track NAV, with tight spreads and a functional creation-redemption arbitrage mechanism," suggesting the model can work effectively in regulated products. NYSE Arca has already submitted an amended Form 19b-4 application requesting the rule change that would permit staking in Grayscale's Ethereum | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
15-04-2025
- Business
- Yahoo
SEC Delays Staking Decision on Grayscale's ETHE, ETH
The Securities and Exchange Commission delayed ruling on whether or not to permit so-called "staking" in Grayscale Investment's Ethereum ETFs, saying more time is needed to consider changing the rules. The SEC said in an April 14 filing that it will approve, reject, or institute further proceedings on, staking in the $1.9 billion Grayscale Ethereum Trust ETF (ETHE) and the $712 million Grayscale Ethereum Mini Trust ETF (ETH) by June 1. The agency also delayed permitting in-kind redemptions for VanEck's Bitcoin and Ethereum ETFs, according to another April 14 filing. VanEck manages the $1.2 billion VanEck Bitcoin ETF (HODL) and the $67.7 million VanEck Ethereum ETF (ETHV). The rule change would permit redemptions in the underlying asset, and not necessarily in cash, and avoids a taxable event. Ethereum's outflows and price declines may be relieved if staking—the cryptocurrency's validation mechanism, which acts as a sort of yield device—were introduced, BlackRock Inc.'s (BLK) digital assets chief Robert Mitchnick said recently. Staking offers participants rewards in exchange for locking up their crypto for a period, and permitting that in the Ethereum ETF would stoke investor interest, BlackRock said. The decision to delay comes on the heels of Paul Atkins being named SEC Commissioner on April 9. Atkins was tapped to lead a more crypto-friendly commission, departing from the skeptical and cautious crypto stance of predecessor Gary Gensler. The crypto industry largely endorsed President Donald Trump and his promise to reduce restrictions on digital currencies. Ethereum ETFs have fallen hard this year, with ETHE's price cut in half amid $565.6 million in outflows as rival cryptocurrencies appeal to investors. Bitcoin ETFs, on the other hand, have gained recently, and the iShares Bitcoin Trust (IBIT) has pared some losses so that it's now down 9% since the year began. ETHE is the largest spot-ethereum ETF, and the New York Stock Exchange sought permission to permit staking in the fund in early March. Grayscale, based in Stamford, Connecticut, didn't immediately respond to a request seeking | © Copyright 2025 All rights reserved Sign in to access your portfolio
Yahoo
22-03-2025
- Business
- Yahoo
Why 'Staking' Could Give Ethereum ETFs a Much-Needed Boost
Ethereum ETFs' struggles with outflows and price declines may be relieved if "staking," the cryptocurrency's validation mechanism which acts as a sort of yield device, were introduced, BlackRock Inc.'s (BLK) digital assets chief said this week. Ethereum spot exchange-traded funds have badly lagged their Bitcoin counterparts since being introduced in June, six months after spot Bitcoin ETFs began trading. The two largest, the Grayscale Ethereum Trust ETF (ETHE) and the iShares Ethereum Trust (ETHA), both with about $2.5 billion in assets, have plummeted 43% over the past three months while the largest spot Bitcoin fund, the iShares Bitcoin Trust (IBIT) has dropped 13%. Ethereum ETF investors' inability to earn a staking yield may be contributing to their outflows and falling prices, BlackRock's Robert Mitchnick said at the Digital Asset Summit on March 20 in New York, according to CNBC. Staking offers participants rewards in exchange for locking up their crypto for a period, and permitting that in the Ethereum ETF would stoke investor interest, he said. 'There's no question it's less perfect for ETH today without staking,' CNBC reported Mitchnick as saying. 'A staking yield is a meaningful part of how you can generate investment return in this space, and all the [ether] ETFs at launch did not have staking.' Mitchnick's comments come as efforts are underway to persuade the Securities and Exchange Commission to permit staking in Ethereum ETFs. Bitwise Asset Management and the New York Stock Exchange this week sought a rule change that would permit the Bitwise Ethereum Trust (ETHW) to offer staking rewards. Bitwise, which also manages the Bitwise Bitcoin ETF (BITB) among other crypto ETFs, in November bought London-based crypto firm Attestant to add staking services to its asset management services. Approximately $527 million has been pulled from the two biggest Ethereum ETFs over the past month. Source: data With around $7 billion in eight funds, Ethereum ETFs are dwarfed by the approximately $95 billion, according to Bloomberg, in the dozen or so spot Bitcoin ETFs. Bitcoin and Ethereum are the only cryptocurrencies permitted in spot ETFs, while other digital assets trade in futures | © Copyright 2025 All rights reserved
Yahoo
21-03-2025
- Business
- Yahoo
Why 'Staking' Could Give Ethereum ETFs a Much-Needed Boost
Ethereum ETFs' struggles with outflows and price declines may be relieved if "staking," the cryptocurrency's validation mechanism which acts as a sort of yield device, were introduced, BlackRock Inc.'s (BLK) digital assets chief said this week. Ethereum spot exchange-traded funds have badly lagged their Bitcoin counterparts since being introduced in June, six months after spot Bitcoin ETFs began trading. The two largest, the Grayscale Ethereum Trust ETF (ETHE) and the iShares Ethereum Trust (ETHA), both with about $2.5 billion in assets, have plummeted 43% over the past three months while the largest spot Bitcoin fund, the iShares Bitcoin Trust (IBIT) has dropped 13%. Ethereum ETF investors' inability to earn a staking yield may be contributing to their outflows and falling prices, BlackRock's Robert Mitchnick said at the Digital Asset Summit on March 20 in New York, according to CNBC. Staking offers participants rewards in exchange for locking up their crypto for a period, and permitting that in the Ethereum ETF would stoke investor interest, he said. 'There's no question it's less perfect for ETH today without staking,' CNBC reported Mitchnick as saying. 'A staking yield is a meaningful part of how you can generate investment return in this space, and all the [ether] ETFs at launch did not have staking.' Mitchnick's comments come as efforts are underway to persuade the Securities and Exchange Commission to permit staking in Ethereum ETFs. Bitwise Asset Management and the New York Stock Exchange this week sought a rule change that would permit the Bitwise Ethereum Trust (ETHW) to offer staking rewards. Bitwise, which also manages the Bitwise Bitcoin ETF (BITB) among other crypto ETFs, in November bought London-based crypto firm Attestant to add staking services to its asset management services. Approximately $527 million has been pulled from the two biggest Ethereum ETFs over the past month. Source: data With around $7 billion in eight funds, Ethereum ETFs are dwarfed by the approximately $95 billion, according to Bloomberg, in the dozen or so spot Bitcoin ETFs. Bitcoin and Ethereum are the only cryptocurrencies permitted in spot ETFs, while other digital assets trade in futures | © Copyright 2025 All rights reserved
