Bernstein Predicts Inclusion of Staking in ETH ETFs

The new leadership of the SEC is expected to approve Ethereum-based exchange-traded funds that will allow holders to earn additional income from staking, according to Bernstein, as reported by The Block.

“Amid declining rates in TradFi, the current Ethereum yield of 3%, which could rise to 4–5% with increased on-chain activity, is becoming increasingly attractive,” the review states.

Experts highlighted the asset’s attractive risk-reward ratio and noted the strength of its fundamental indicators.

Since the beginning of the year, Ether has risen in price by approximately 57%, lagging behind Bitcoin (125%) and Solana (122%).

This is due to issues with confirming “hard money” compared to Bitcoin, competition from faster L1 blockchains, and reliance on L2 for scaling, which worsens user experience and restrains fee growth.

In addition to the inclusion of staking in ETFs, experts identified positive fund inflows and a surge in network activity as drivers for improvement.

The transition of Ethereum to PoS and the burn mechanism have stabilized supply at around 120 million ETH. Meanwhile, 28% of the total is locked in staking and another 10% in lending operations or L2 bridges.

Considering that 60% of available coins have not moved in the past year, these factors indicate a stable investor base and favorable supply-demand dynamics, specialists noted.

Back in May, the Commission approved 19b-4 forms for the instrument, and two months later, S-1 filings. None of the proposals included staking. At that time, Hester Peirce of the SEC assured that “any feature of products is always open for reconsideration.”

In July, Bloomberg analyst Eric Balchunas suggested that both staking and the option for in-kind redemption could become realities with a change in the U.S. presidency. Variant’s chief legal officer Jake Chervinsky agreed, noting that it is a matter of time, not possibility.