- Novogratz is expecting US ETH ETF staking to reach a peak in the next two years.
- There are still regulatory risks and Ethereum concentrations for ETH ETF staking.
Mike Novogratz, CEO of Galaxy Digital, claimed to have staked a US position. Ethereum [ETH] ETFs are inevitable, despite current SEC stance.
Then, you can get in touch with us. interview on the sidelines of the Consensus 2024, Novogratz maintained that ‘you’d rather get a yield than not get a yield.’ Novogratz replied that such a thing would occur with the US Ethereum ETFs.
‘’I would argue that within 12-24 months after the ETH ETFs without staking happen, they will change the rules and allow staking.’
Eric Balchunas, Bloomberg ETF analyst, estimated that the S-1 registration statement approval and launch of spot ETH ETFs would occur in June or July. Novogratz would then project that the staking will take place around 2025-2026.
SEC’s stake stance, risks and stance
US SEC always opposes crypto-staking. Kraken paid $30 million to the SEC last year and shut down its US stake operation.
Additionally, potential US spot Ethereum ETF issuers dropped previous ‘staking provisions’ on the 19b-4s forms before the SEC approved them on 23rd May. That indicated that the ‘staking provisions’ could have been compliance hurdles for the approvals.
Moreover, some have expressed concern that the US ETF spot ETH staking may increase centralization risk on the Ethereum network.
According to an S&P Global reportStaking ETH ETFs could have both positive and negative effects. On the positive side, S&P Global noted,
The participation of institutional custodians would reduce the current concentration in the Lido platform for decentralized stakes’
Lido is still a market leader in ETH stake, despite losing some of its share. dominated Market share is 28%. Coinbase comes second at 13%, and Ether.Fi third at 3%.
On the negative, the S&P Global warned that,
‘It may also introduce new concentration risk, particularly if a single entity is chosen to stake These ETFs include a large amount of ETH
Bloomberg has recently published a report that says the opposite. reportHong Kong had planned to allow the ETH ETF to be staked on-the-spot.
Market observers believe the move could boost demand for Hong Kong’s spot ETH-ETFs, even though they had a lukewarm launch in late April.
The US regulator is yet to decide whether it will take Hong Kong’s example and reverse its position on staking, and the potential security impact of this practice on the Ethereum network.
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Source: ambcrypto.com