2 months ago
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The Chicago Board Options Exchange (Cboe) has filed a Form 19b-4 with the US Securities and Exchange Commission (SEC) to introduce staking capabilities for the 21Shares Core Ethereum ETF (CETH).
This application, if approved, would mark the first instance where an Ethereum ETF in the US includes staking, allowing investors to potentially earn additional returns from their investments.
Application seeks to amend the structure of Ethereum ETF
The filing submitted by Cboe BZX Exchange on behalf of 21Shares seeks to amend the structure of the previously named ARK 21Shares Ethereum ETF to now include staking of its Ethereum holdings.
This approach, termed “point-and-click staking,” ensures that Ethereum remains securely in custody while participating in the network’s staking mechanism.
Staking rewards, treated as income for the fund, would be distributed among investors, providing a passive income stream akin to dividends in traditional equity ETFs.
According to the filing, not staking the Trust’s Ether would be akin to waiving the right to earn additional Ethereum, an opportunity that would otherwise go untapped.
By allowing the Trust to stake its Ether, the ETF aims to better track the total returns associated with holding Ether, thus benefiting its investors.
Ethereum price reaction
Following the announcement of this staking application, Ethereum (ETH) price jumped by over 12%, with prices rising from a low of $2,565 to an intraday peak of $2,790.
However, Ethereum seems unable to sustain the surge, as it has retreated to $2,678.78 at press time, possibly reflecting some market volatility amidst the news.
The Relative Strength Index (RSI) indicator also reflected some volatility, jumping to around 60 and then dropping to around 51.23 at press time.
While the RSI shows there is still room for ETH to rise before entering the overbought region, it might be difficult to sustain the bullish stance seeing that the price has been on a bearish trend since hitting its 2025 high at the beginning of January.
Notably, the price of Ethereum has dropped by about 40% from its high of $3,742.
Ethereum price chart by TradingView.Will 21Shares Core Ethereum ETF be allowed to include staking?
Historically, the US SEC has been cautious about integrating staking into ETFs due to concerns over securities laws.
However, recent changes in SEC leadership, including establishing a new crypto task force led by pro-crypto Commissioner Hester Peirce, have renewed optimism among market participants that this proposal might find favour.
Bloomberg ETF analyst James Seyffart believes this could be the first ETF to gain SEC approval for staking, though he remains cautious given the regulatory uncertainties.
Assuming this is acknowledged by the SEC (I’d probably make that assumption right now but you never know): The final deadline on this filing will be somewhere around the end of October. Like October 30th-ish. Will know more in next few weeks.
The SEC has up to 240 days (8 months) to review and decide on this application.
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