Originally published on: December 02, 2024
Ethereum exchange-traded funds (ETFs) in the United States might soon introduce staking yields, as per a recent report by Bernstein Research on December 2.
Bernstein Research stated, “We anticipate that with a more crypto-friendly Securities and Exchange Commission under a potential Trump 2.0 administration, approval for ETH staking yield could be on the horizon.”
For those unfamiliar, staking involves locking up Ether as collateral with a validator on the Ethereum blockchain network. Stakers receive ETH payouts from network fees and other rewards but face the risk of losing ETH collateral through “slashing” if the validator behaves improperly.
As of now, staking ETH yields around 3.1% annualized returns (APR), expressed in ETH, according to data from StakingRewards.com.
“We believe that ETH yield could potentially increase to 4-5% with heightened network activity levels on the Ethereum blockchain,” mentioned Bernstein in their report.
The possibility of staking being approved sooner than expected has risen due to potential changes in financial regulators under the upcoming presidency. With President-elect Donald Trump’s vision to transform the US into the “world’s crypto capital,” selecting crypto-friendly leaders to head financial bodies could expedite the approval process, as per Bernstein.
Furthermore, the analysts highlighted ETH as an appealing investment opportunity, with growing investor interest following a period of underperformance compared to Bitcoin. The surge in net inflows of $2.2 billion into Ethereum investment funds in 2024, surpassing the previous record of around $2 billion in 2021, indicates a substantial shift in sentiment towards ETH, as reported by CoinShares.
VanEck’s head of digital asset research, Matthew Sigel, predicts that the Ethereum network could potentially generate up to $66 billion in annual free cash flow by 2030, propelling spot ETH’s price to as high as $22,000 per token.
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