U.S. Ethereum exchange-traded funds (ETFs) may soon feature staking yields, according to a Dec. 2 report from Bernstein Research.
“We believe it will be crypto-friendly under the new Trump 2.0.” [Securities and Exchange Commission]ETH staking yield is likely to be approved,” Burstein said. said.
Staking involves locking up Ether (ETH) as collateral using validators on the Ethereum blockchain network. Stakers earn ETH payouts from network fees and other rewards, but they risk “slashing” or losing their ETH collateral if a validator misbehaves.
As of December 2nd, staking ETH yields approximately 3.1% annualized return (APR) denominated in ETH. According to Go to StakeRewards.com.
“[W]Bernstein said he believes ETH yields will rise further to 4-5% as activity levels increase on the Ethereum blockchain network.
sauce: StakeRewards.com
Related: Ethereum Fund Expects Record Net Inflows of $2.2 Billion in 2024
Crypto-friendly US leadership
In July, the Securities and Exchange Commission allowed Spot Ethereum ETFs to trade in the U.S., despite multiple requests from ETF issuers, including Fidelity, 21Shares and Franklin Templeton, to seek additional yield. Banned funds from staking ETH.
US President-elect Donald Trump, who is currently pledging to turn the US into the “crypto capital of the world,” will appoint crypto-friendly leaders to top financial regulators at the start of his presidential term on January 20, 2025. It is reported that they are considering appointing a new leader.
Bernstein said this could result in staking being approved sooner than previously thought.
Ether Risk and Reward Profile
Analysts also said they view ETH as an attractive investment opportunity, citing increased investor interest after a period of underperformance compared to Bitcoin (BTC).
“Ethereum's fundamentals look solid, and recent changes in ETF inflows indicate a definite resurgence of interest,” Bernstein said.
According to CoinShares, the Ether investment fund posted record net inflows of $2.2 billion in 2024, finally surpassing the cryptocurrency's 2021 net inflow record of about $2 billion, and a “dramatic shift in sentiment” towards ETH. It is said that this reflects a “turnaround for the better.”
Matthew Sigel, head of digital asset research at VanEck, predicts the Ethereum network will generate up to $66 billion in free cash flow annually by 2030, driving the price of spot ETH to $22,000 per token.
magazine: 5 great use cases for Based Agents and Near's AI Assistant
