Ethereum Spot ETF Encounters Staking Expectations, Which Coins Will Benefit?

Original Title: "Ethereum Spot ETF Welcomes Staking Expectation, Which Coins Will Benefit?"

Original Author: Azuma, Odaily Planet Daily

In July of this year, the U.S. Securities and Exchange Commission (SEC) formally approved the trading application for an Ethereum Spot ETF, making ETH the second cryptocurrency to land on the traditional financial trading market in ETF form after BTC.

However, after 4 months, the traditional financial market has not shown the same enthusiasm towards ETH as it did towards BTC. The main reason for this is primarily due to ETH's narrative emphasizing technological innovation, which is less appealing to the traditional market compared to BTC's "digital gold"; secondly, the continuous selling pressure from Grayscale's ETHE, and the SEC's prohibition of Ethereum Spot ETFs engaging in staking functionality have objectively weakened its attractiveness.

For investors in the Ethereum Spot ETF, currently holding ETH through ETF form means missing out on staking rewards (currently around 3.5%), in addition to having to pay a management fee of 0.15% to 2.5% to the ETF issuer. Although some investors may not mind giving up this income for the sake of convenience and security, there will inevitably be some investors who will seek alternative options as a result, or even postpone their investment intentions.

With Trump's victory, this situation is now undergoing a turning point. The market expects that the cryptocurrency regulatory environment will be effectively improved, and Ethereum Spot ETFs are also expected to introduce staking functionality, thereby enhancing the attractiveness of this investment product and further boosting the strength of ETH.

· On November 13, ETF issuer Bitwise announced that it had acquired Ethereum staking service provider Attestant. Bitwise CEO Hunter Horsley stated in an interview that currently one-fifth of Bitwise's clients want to earn income through staking, but in a few years, most clients may have this need.

· On November 20, European cryptocurrency ETP issuer 21 Shares AG announced that it has added staking functionality to its Ethereum Core ETP product and renamed it "Ethereum Core Staking ETP" (ETHC). This product is currently listed on the Swiss Stock Exchange, German Xetra Exchange, and Amsterdam Pan-European Exchange.

· On November 22, a figure seen as opposing cryptocurrency regulation, SEC Chair Gary Gensler, announced that he will step down on January 20, 2025, further increasing the likelihood of the introduction of staking features in Ethereum spot ETF.

Which Crypto Assets Will Benefit?

Firstly, the introduction of staking features in Ethereum spot ETF will directly benefit ETH — this will directly enhance the investment appeal of the Ethereum spot ETF, perhaps being one of the reasons for ETH's recent relative strength.

Furthermore, this shift will also indirectly benefit the staking sector and the upper-layer re-staking sector.

In the staking sector, Lido (LDO), Rocket Pool (RPL), Ankr (ANKR), Frax (FXS) have all recently gone through a long consolidation phase and have shown some signs of recovery.

Among them, LDO and RPL need special mention. In June of this year, the SEC sued Lido and Rocket Pool, arguing that the stETH and rETH issued by the two platforms constitute securities, which at the time caused a short-term plunge in LDO and RPL. It is expected that with Gensler's departure, this lawsuit will be resolved in a more amicable manner.

Regarding the re-staking sector, EigenLayer (EIGEN) has shown a strong rebound after setting an embarrassing all-time low last week, holding steady at the key level of $3 amid a significant pullback in BTC price. As a cornerstone protocol in the race, EIGEN's future trend is expected to significantly impact the future performance of ecosystem projects such as ether.fi (ETHFI), Renzo (REZ), Puffer (PUFFER).

In addition to such crypto assets, some other enterprises providing staking services will also attract more business opportunities from the introduction of staking features in Ethereum spot ETF, such as the publicly listed Coinbase (COIN). As a major custodian for Bitcoin spot ETF and Ethereum spot ETF, Coinbase has also issued liquidity derivative tokens like cbETH. Although there is currently no specific news, it is expected that some ETF providers will tend to continue choosing Coinbase's services.

Business Connections Limited, Emotion-Driven Dominance

Looking at the recent market performance overall, ETH, the Staking sector's LDO and RPL, the Re-staking sector's EIGEN, and ETHFI have all experienced a fairly decent rebound.

However, even after the confirmation of Ethereum spot ETFs introducing staking capabilities, this part of the business may also find it difficult to flow into native cryptocurrency liquidity staking tokens (LST) or liquidity restaking tokens (LRT) such as stETH, rETH, eETH, etc. ETF issuers might potentially either acquire staking service providers on their own, as Bitwise did, or directly choose reputable platforms like Coinbase as mentioned earlier.

Therefore, ultimately, the rapid rebound of the Staking and Re-staking sectors is still mainly driven by market sentiment in the short term, and actual business opportunities may be relatively limited... But then again, the most precious thing in a bull market is sentiment, which is not a bad thing for the long-muted Ethereum ecosystem.

Original Article Link