Grayscale adds ETH Staking to the Ethereum ETF app

In a new SEC filing yesterday, Grayscale argued the benefits of “shared Ethereum held in trust.” The company is hoping to convert the Greyscale Ethereum Trust (ETHE) into an ETH spot ETF, just as it did the Greyscale Bitcoin Trust in January.

The proposal, seen yesterday in a preliminary proxy statement, outlines four proposals for converting the Grayscale Ethereum Trust (ETHE) into an ETF. In addition to using ETH support shares to participate in the Proof of Stake Protocol, the organization will provide authorized participants with the ability to create and redeem shares, requiring Grayscale to review and generate payments on a daily rather than monthly basis. A third-party custodian that can create and redeem shares with an omnibus account.

Brokers use omnibus accounts to pool funds and trade on behalf of their clients. But since the account does not belong to those customers only, it obscures the identity of the investor.

Greyscale CEO Michael Sonnenschein expressed his optimism about the reforms, stating that they aim to modernize and simplify ETHE shares for shareholders. This move mirrors a similar application by Fidelity Investments, which shows growing interest in Ethereum-based ETFs.

In an update earlier this week, Fidelity wrote that “in consideration of any significant activity in which the Fund may participate, the Fund will receive certain Network Rewards of Ether Tokens, which may be considered compensation for services rendered to the Fund.” .

However, the future of spot ether ETFs looks bleak, as Bloomberg ETF analysts say the US Securities and Exchange Commission (SEC) is likely to reject all pending applications. This doubt was fueled by the SEC's special classification of digital assets, and its chairman, Gary Gensler, identified Bitcoin as the only commodity, which is ambiguous in the case of Ethereum.

Despite the regulatory hurdles, the cryptocurrency community remains hopeful that the approval of an Ethereum ETF could replicate the positive market impact seen with Bitcoin ETFs.

ETF or not, the price of Ethereum is struggling to gain any ground today. At the time of writing, Ethereum is at $3,283.72 – a 1.6% gain from yesterday and a 19% decrease compared to last week, according to CoinGecko data.