SEC Delays Decision on Grayscale's Ether Staking ETFs Until June 1

The United States Securities and Exchange Commission (SEC) has delayed its decision on whether to approve Ether staking in two Grayscale funds. The decision on the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF has been postponed until June 1, as announced by the SEC on April 14. The final deadline for a decision is set for the end of October.

On February 14, the New York Stock Exchange (NYSE) filed a proposed rule change on behalf of Grayscale, which would allow investors in the company’s Ether (ETH) ETFs to stake their holdings. Staking involves locking up cryptocurrency in a wallet to support the operations and security of a blockchain network, offering stakers rewards in return. This feature is considered a potentially integral part of Ether ETFs, as it could generate yield for investors, thereby increasing the attractiveness of the funds.

Despite the delay on staking filings, the SEC is moving forward with regulatory requests surrounding crypto ETFs. On April 9, the agency approved options trading for multiple spot Ether ETFs, allowing this derivatives feature on funds from BlackRock, Bitwise, and Grayscale's ETFs. Options trading involves the right to buy and sell contracts that give investors the right, but not the obligation, to buy an asset at a certain price. This approval broadens the funds' utility for institutional investors.

The efforts to expand the appeal of Ether ETFs reflect the lack of adoption in contrast with Bitcoin (BTC) ETFs, which were launched in January 2024. While Ether ETFs have amassed a net cumulative inflow of $2.28 billion as of April 11, Bitcoin funds flows topped $35.4 billion. The race for staking on Ether ETFs includes other asset managers, such as BlackRock's 21Shares iShares Ethereum Trust, which sought permission to offer staking services in February and is currently awaiting agency approval.

Ether has faced challenges during this bull market compared to other assets like XRP and Solana. The asset’s 52-week high of $4,112 did not surpass its November 2021 peak all-time-high value of $4,866. The token is trading below the $2,000 mark as of April 14.