Staking may be coming soon to US Ether ETFs: Bernstein
U.S. Ethereum exchange-traded funds (ETFs) may soon show higher yields, according to a Dec. 2 report by Bernstein Research.
“We believe in the new Trump 2.0 crypto-friendly foundation. [Securities and Exchange Commission]ETH stock production will be approved,” Berstein said.
Staking involves locking Ether (ETH) as collateral with proof on the Ethereum blockchain network. Stakeholders earn ETH payments from network fees and other rewards, but can “cut” – or lose their ETH guarantee – if the validator misbehaves.
In the year As of December 2nd, staking ETH yields approximately 3.1% Annual Percentage Returns (APR), denominated in ETH, according to StakingRewards.com.
“[W]They think ETH production can increase up to 4-5% with a higher level of activity,” said Bernstein on the Ethereum blockchain network.
ETH Performance Chart. Source: StakingRewards.com
Related: Ethereum Funds See Record Net Inflows of $2.2B in 2024
Crypto-friendly American leadership
In July, the Securities and Exchange Commission allowed Ethereum ETFs to trade in the U.S., but barred the fund from adding ETH to additional products, including ETF issuers Fidelity, 21Shares and Franklin Templeton.
Now, US President-elect Donald Trump – who has vowed to turn America into the “crypto capital of the world” – is reportedly advocating for crypto-friendly leaders to lead financial regulators when he takes office on January 20, 2025.
That could open the door to approval sooner than previously thought, Bernstein said.
Ether's risk-reward profile
The analysts said that they see ETH as an attractive investment opportunity, citing increasing investor interest after underperforming Bitcoin (BTC).
“Ethereum's fundamentals look strong and recent ETF inflows indicate a strong resurgence of interest,” Bernstein said.
Ether Investment Fund sees $2.2 billion in net income in 2024, eventually surpassing the cryptocurrency's 2021 net inflow record by nearly $2 billion, reflecting a “dramatic turnaround in sentiment” for ETH, CoinShares reported.
VanEck's head of digital asset research, Matthew Siegel, expects the Ethereum network to generate up to $66 billion in annual free cash flow by 2030, with the price of ETH reaching $22,000 per token.
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