A new report from Bernstein Research reveals that U.S. Ethereum ETFs may soon include staking yields, which could make investing in ETH even more attractive.
Stakeholder capitalism
Bernstein believes that with a new, crypto-friendly Securities and Exchange Commission under a business-friendly Trump administration, the approval for ETH staking yields is likely on the horizon.
They noted that as interest in Ethereum rises compared to Bitcoin, this could be a game changer for investors.
So, what exactly is staking? It involves locking up your Ether as collateral with a validator on the Ethereum blockchain.
In return, stakers earn ETH payouts from network fees and other rewards. But there’s a catch, because if the validator messes up, you risk losing some of your staked ETH, a process also known as slashing.
As of December 2, staking ETH yields about 3.1% annualized percentage returns, and this is already better than banks’ saving accounts, but Bernstein thinks that with increased activity on the Ethereum network, those yields could rise to between 4-5%.
New SEC, new growth?
Back in July, the SEC greenlit spot Ethereum ETFs to trade in the U.S., but they didn’t allow these funds to stake ETH for extra yield, a bummer for ETF issuers like Fidelity and 21Shares who had been hoping for that option.
Now, with Donald Trump set to take office again on January 20, 2025, he’s reportedly considering appointing crypto-friendly leaders to head financial regulators.
This shift could pave the way for staking approvals sooner than expected.
Bernstein analysts see ETH as a promising investment opportunity even without staking, especially given the growing interest after a rough patch compared to Bitcoin.
They pointed out that Ethereum fundamentals look strong, and ETF inflows signal a resurgence of interest.
Money talks
Ethereum investment funds have recorded net inflows of $2.2 billion in this year, finally surpassing the previous record of around $2 billion set in 2021.
This reflects a significant turnaround in sentiment towards ETH, but Matthew Sigel, head of digital asset research at VanEck, is even more optimistic.
He predicts that the Ethereum network could generate up to $66 billion in annual free cash flow by 2030, potentially driving the price of spot ETH up to $22,000 per token.
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