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Recently, it was reported that the NYSE Arca has submitted an application to the U.S. Securities and Exchange Commission (SEC) for approval to engage in staking activities in the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF. Soon after submission, the regulator acknowledged the receipt, as featured in our recent coverage. SEC also highlighted a rule change that could permit Grayscale’s Ethereum ETFs to stake the underlying asset through various trusted providers. According to our information, this staking process is expected to be managed only by the ETF’s sponsors. In doing so, the staked ETH would be effectively supervised and ensured that it is not pooled with other entities. Meanwhile, Coinbase Custody would secure its ETH holdings and maintain the existing security framework. According to reports, the SEC has until May 26, 2025 to make a decision on this proposal. Within the period, there will be an initial 45-day decision timeline where a review will be conducted. This would include a public comment period, henceforth, the timeline is subject to extension to 90 days. This proposal follows a recent disclosure that the Cboe BZX Exchange has equally filed a proposal to seek staking approval in the 21Shares Core Ethereum ETF. As mentioned in our previous blog post, Bloomberg ETF analyst James Seyffart recognized this as the first-ever application by an ETF for Ethereum staking. The discussion surrounding staking has become a big deal due to its past challenges. Earlier, former SEC chair Gary Gensler cautioned that cryptos that stake their coins could pass the Howey Test and be recognized as securities. Per that report, staking has many similarities with lending. Meanwhile, crypto lending was required to be registered with the SEC. Fortunately, there seems to be a significant shift of interest towards staking under the new US administration. Confirming this, Fox Business journalist Eleanor Terrett recently disclosed that the Agency has requested a memo containing information on the different types of staking and their benefits. According to a source who recently spoke with the SEC, the agency is “very, very interested” in staking, even asking the industry for a memo detailing the different types of staking and their benefits. This source expects to see some kind of agency guidance on staking in the near future as it’s a topic they’re engaging enthusiastically on. Last week, staffers from the Division of Trading and Markets took part in a staking webinar with some industry players, as I reported on Friday. Following this development, the price of ETH surged by 1% on the 24-hour price chart. However, its weekly gains remain 7.8% down while its 30-day returns also decline by 19%. At press time, ETH was trading at $2.49k. According to our recent analysis , the asset could stage a rebound to hit $7k this cycle.

The SEC has confirmed receipt of a 19b-4 filing from NYSE Arca seeking approval for staking functionality in the Grayscale Ethereum ETF.

The crypto market is in a full-scale meltdown, with $325 billion in market cap wiped out since Friday morning as of press time, according to data from Coinglass, which also shows that the largest drop was when $100 billion disappeared within one hour. There were no major headlines covering the sudden crash, making it seem like not a big deal at all, almost as if no one even cared anymore. Even meme coins, which had been on fire in recent weeks, have taken a severe hit. Liquidity has dried up across the board, raising concerns about even more downside. The sell-off of course started with the Bybit hack on February 21 when North Korea’s Lazarus Group pulled off the biggest financial heist in history, draining $1.5 billion from Bybit’s Ethereum wallets. This theft was so big, it’s double the size of the previous record-holder, which is the $611 million PolyNetwork hack that happened in 2021. Ethereum, which was already performing terribly, got even worse as traders scrambled to pull funds out, fearing another FTX-style collapse. Even though Bybit CEO Ben Zhou quickly announced that the exchange would cover all losses, it wasn’t enough to restore confidence. Traders don’t forget billion-dollar hacks that easily. At first, Bitcoin stayed out of the mess. However, once the S&P 500 tanked on Friday, Bitcoin broke down too. The second stocks started slipping, Bitcoin followed, losing its key $98,000 support level. One major factor that sent Bitcoin spiraling was Citadel Securities, which announced yesterday that it was moving into crypto as a liquidity provider. Instead of reassuring traders, it triggered a “sell the news” reaction, with investors rushing for the exits. Memecoins collapse, Bitcoin struggles Solana, which has now dropped 22% since Friday. The memecoin sector, which had been one of crypto’s wildest success stories this year, is getting slaughtered. With Solana’s crash, traders dumped their memecoins en masse, draining the last bit of liquidity from the market. This actually started when Argentina’s President Javier Milei publicly endorsed LIBRA, a Solana-based meme coin, which quickly pumped like crazy—until it crashed into oblivion, wiping out $4.6 billion in investor money. The scandal-tainted Solana’s reputation, and now, with $1.72 billion in SOL tokens set to be unlocked on March 1, the market is preparing for even more selling pressure. According to digital asset manager Arca, altcoins as a group have already lost between 30-80% since mid-December. Even Dogecoin, which had been riding on Elon Musk’s federal workforce cuts, is down nearly 7%. Crypto-related stocks are also taking a beating, as Coinbase has fallen for six straight days, which is its worst losing streak in months. Bitcoin miner MARA Holdings, which already plunged 13% last week, has lost another 2.6% today, and Strategy (formerly MicroStrategy) is also slipping, despite doubling down on Bitcoin buys, per data from Google Finance. On Monday, Strategy filed with the SEC, revealing that it had once again bought 20,356 Bitcoin between February 18-23 for $97,514 per coin, worth a total $1.99 billion. This makes it one of the company’s biggest Bitcoin acquisitions ever, pushing Strategy’s total holdings to $47.7 billion—equivalent to 2.5% of all Bitcoin that will ever exist. The company funded this buy with proceeds from its $2 billion convertible bond sale last week. Cryptopolitan Academy: Coming Soon - A New Way to Earn Passive Income with DeFi in 2025. Learn More

NYSE Arca’s filing for a spot Cardano exchange-traded fund has been acknowledged by the United States Securities and Exchange Commission. According to a Feb. 24 notice from the regulator, it has formally acknowledged the proposal to list and trade shares of the Grayscale Cardano Trust under NYSE Arca Rule 8.201-E. This kicks off the review process, where the SEC will eventually decide whether to approve or reject the ETF. From here on, a 240-day review window begins once the filing is published in the Federal Register, which usually happens within a few days of the SEC’s acknowledgement. NYSE Arca initially filed the proposal through a 19b-4 form earlier this month, marking the 60th crypto ETF filing so far this year. The filing serves as a formal request for a rule change, after which it must secure an S-1 registration statement before it can begin trading. If approved, the Grayscale Cardano Trust will give investors exposure to Cardano (ADA) without having to directly hold the asset. Instead, investors would buy shares of the trust, with the price tied to an index tracking ADA’s value across major exchanges like Coinbase, Kraken, Crypto.com, and Bitfinex. Interestingly, despite Bitfinex not holding any US licenses, it was still included in the index as it met liquidity requirements. Coinbase Custody Trust Company would handle the safekeeping of the fund’s assets, while BNY Mellon would serve as the transfer agent and administrator. ADA has failed to react to the latest development and was down over 8% when writing. In contrast, when Grayscale initially filed the 19b-4, the altcoin shot up 11%. Meanwhile, the odds of the SEC approving a Cardano ETF in 2025 have risen by over 10% in the past day on Polymarket, currently reflecting a 65% chance of approval. With crypto-friendly leadership within the SEC, the industry is hopeful that the commission would be more open towards approving digital asset investment products. This acknowledgement of Grayscale’s Cardano ETF filing is just the latest in a series of similar moves by the SEC in recent weeks. In February alone, the commission formally recognized multiple crypto ETF filings across a range of assets. Just days before, the SEC acknowledged a 19b-4 filing from 21Shares via the Cboe BZX Exchange, aiming to allow the staking of Ethereum within its ETF. If approved, this would mark the first instance of an Ethereum ETF offering staking rewards to US investors. Filings for Litecoin (LTC) and XRP spot ETFs from CoinShares were also officially acknowledged, alongside Grayscale’s proposal for a spot XRP and Dogecoin ETF. Grayscale also revised its application for a Solana ( SOL ) spot ETF, which was acknowledged by the SEC on Feb. 6.

Analysis: Crypto market weak for eight weeks, altcoins likely to struggle further The crypto market has remained weak for eight consecutive weeks, with most tokens declining 30–80% since mid-December, according to Bloomberg cited by The Business Times. Jeff Dorman, chief investment officer at Arca, attributed this downturn to poor sentiment, memecoin failures and a lack of capital for new token launches. Meanwhile, Edward Chin, co-founder of Parataxis, noted that altcoins are struggling as existing investors are already fully invested while new capital flows into Bitcoin $BTC, reinforcing BTC dominance. Without a compelling narrative, altcoins are likely to keep declining until sentiment improves, he added.