Original | Odaily Planet Daily (@OdailyChina)
Author | Azuma (@azuma_eth)
In July of this year, the U.S. Securities and Exchange Commission (SEC) officially approved the trading application for Ethereum spot ETFs, making ETH the second crypto asset after BTC to enter the traditional financial trading market in ETF form.
However, four months have passed, and the traditional financial market has not shown similar enthusiasm for ETH as it has for BTC. The main reason lies in the fact that ETH's narrative as a tech innovation product is less likely to resonate with the traditional market compared to BTC's 'digital gold'; additionally, the continuous selling pressure from Grayscale's ETHE and the SEC's restriction on Ethereum spot ETFs involving staking features have objectively weakened its attractiveness.
For investors in Ethereum spot ETFs, holding ETH through ETFs currently means missing out on staking yields (currently around 3.5%), and they also need to pay an additional management fee of 0.15% to 2.5% to the ETF issuer. Although some investors may not mind giving up this yield for convenience and security, there will inevitably be some investors who will seek alternative options and even set aside their investment inclinations.
With Trump's victory, this situation is now welcoming a turnaround. The market expects that the cryptocurrency regulatory environment will be effectively improved, and Ethereum spot ETFs are also expected to introduce staking features, thereby amplifying the attractiveness of this investment product and promoting the strength of ETH.
On November 13, ETF issuer Bitwise announced the acquisition of Ethereum staking service provider Attestant. Bitwise CEO Hunter Horsley stated in an interview that currently, one-fifth of Bitwise's clients wish to earn yields through staking, but in a few years, most clients may have this demand.
On November 20, European cryptocurrency ETP issuer 21Shares AG announced the addition of a staking feature to its Ethereum core ETP product, renaming it 'Ethereum Core Staking ETP' (ETHC), which is currently listed on the Swiss Stock Exchange, German Xetra Exchange, and Amsterdam Euronext Exchange.
On November 22, Gary Gensler, the SEC chairman viewed as a figure opposing cryptocurrency regulation, announced he would resign on January 20, 2025, further increasing the probability of Ethereum spot ETFs introducing staking features.
Which crypto assets will benefit?
Firstly, the introduction of staking features in Ethereum spot ETFs will directly benefit ETH - this will directly amplify the investment attractiveness of Ethereum spot ETFs, and this might be one of the reasons for ETH's relative strength recently.
Moreover, this shift will also indirectly benefit the staking sector and the higher-level re-staking sector.
In the staking sector, Lido (LDO), Rocket Pool (RPL), Ankr (ANKR), and Frax (FXS) have recently gone through a long consolidation period and have shown a certain upward trend.
Among them, LDO and RPL need to be highlighted. In June of this year, the SEC sued Lido and Rocket Pool, claiming that the stETH and rETH issued by the two platforms constituted securities, which caused a short-term plunge in LDO and RPL. With Gensler's departure, this lawsuit is expected to be resolved in a more peaceful manner.
In the re-staking sector, EigenLayer (EIGEN) rebounded strongly after awkwardly hitting a historical low last week, temporarily holding the critical position of 3 dollars amidst a significant pullback in BTC. As a foundational protocol in the sector, EIGEN's subsequent trends are expected to significantly impact the future performance of ecosystem projects such as ether.fi (ETHFI), Renzo (REZ), and Puffer (PUFFER).
In addition to such crypto assets, other companies providing staking services will also attract more business opportunities from the introduction of staking features in Ethereum spot ETFs, such as Coinbase (COIN), which is already listed on the US stock market. As a major custodian for Bitcoin spot ETFs and Ethereum spot ETFs, Coinbase also issues liquid derivative tokens cbETH. Although there is currently no definite news, it is expected that some ETF service providers will prefer to continue choosing Coinbase's services.
Limited business connections, sentiment-driven dominance
Overall, looking at recent market performance, ETH, the staking sector's LDO and RPL, and the re-staking sector's EIGEN and ETHFI have all achieved relatively good rebounds.
However, even if the introduction of staking features in Ethereum spot ETFs is confirmed, this part of the business may still find it difficult to flow to native liquid staking tokens (LST) or liquid re-staking tokens (LRT) such as stETH, rETH, and eETH. ETF issuers may either independently acquire staking service providers like Bitwise or directly choose reputable platforms like Coinbase as mentioned earlier.
Therefore, in the end, the rapid rebound in the staking and re-staking sectors is still primarily driven by market sentiment in the short term, and there may be fewer actual business opportunities... But to be fair, the most precious thing in a bull market is sentiment, which is not a bad thing for the long-dormant Ethereum ecosystem.
