Can Ethereum ETFs Grow Without Speculation Amid SEC Probe?

Due to regulatory pressure from the US Securities and Exchange Commission (SEC), several high-profile issuers of ether exchange-traded funds (ETFs) – including Arc Investments Management and Fidelity Investments – have removed stakes from their plans.

A strategic change to eliminate staking could improve the chances of an Ether (ETH) ETF approval, but has sparked concern and debate in the crypto industry over the practice of staking.

Locking cryptocurrencies to secure transactions in exchange for rewards – is a top priority for many investors. The lack of stake in Ether ETFs can have a significant impact on appeal compared to direct Ether purchases.

Brian Ruddick, senior strategist at GSR, emphasized that there is “immediate opportunity cost” in holding Ether in the Ether ETF stock void.

De-stake from Ether ETFs built using a proof-of-stake (PoS) mechanism could have broader implications for supply, network security, and decentralization due to the smaller ETH.

An X community member commented on the issues, saying he was asked to remove Ether ETF shares due to Bitcoin (BTC) price volatility.

“[…] The price is less compared to BTC so institutional investors will be involved and ETH will have a supply problem later on.

In response to the post, another X member likened savings to “earning interest on your savings” and falling under the “securities umbrella.”

“[…] So there's no point in the eth ETF, it was all planned from the beginning, and these companies were secretly buying Bitcoin all these months when it was booming.

RELATED: Ethereum ETF decision to pass within hours as BTC price hits $80K in May

Amid conflicting community views on changes to Ether ETFs, the SEC began discussions with spot Ether ETF issuers on May 22.

A decision is expected in the next few hours. The news came as the FIT21 crypto bill passed the US House of Representatives. The bill passed with 208 Republicans and 71 Democrats voting in favor and 136 against.

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