CoinShares’ Valkyrie Funds Will Not Apply For A Spot Ethereum ETF
Bitcoin ETF issuer, Valkyrie Funds will not apply for a spot Ethereum ETF in the United States due to regulatory issues surrounding staking. The company will not join the bandwagon in making filings to the US Securities and Exchange Commission (SEC) towards an Ethereum ETF, Fox Business reporter Eleanor Terrett disclosed, citing sources familiar with the matter.
According to the post on X (formerly Twitter), the company flags the recent staking issue as a major reason because investors may not see value without the feature. Furthermore, the crowded nature of applications will reduce profitability for investors without staking. At the moment, there are nine potential issuers of spot Ethereum ETFs.
SEC Flags Staking
In the last 24 hours, companies have made amendments to the S-1 applications. The major issue lies in the staking feature as the regulator seeks to remove it amid regulatory concerns. Today, Fidelity filed an updated S-1 to the effect that underlying ETH will not be staked.
Staking was lauded as a game changer for Ethereum attracted institutional investors to the asset because of the profitability of staking following the transition to a Proof-of-Stake (PoS) network. However, the SEC hinted that assets that allow holders to stake could be classified as securities.
This led to reduced optimism as seen in the case of Valkyrie Funds. Crypto users reacted with criticisms of the Commission and anticipation for other funds set to offer the products.
Ethereum ETF Frenzy Dominates Crypto Circles
The anticipation for spot Ethereum ETFs spiked following new developments. In the last 24 hours, the price of ETH rallied 23% after market analysts increased their probability for approval. Bloomberg’s analysts James Seyffart and Eric Balchunas increased ratings to 75%.
Similarly, on Polymarket, the probability for approval soared above 50%. This led to an increase in cryptocurrency prices signalling major flows to the market. According to Reuters, the SEC reportedly reached out to update applications and list spot Ethereum’s ETFs. This has ignited another major bullish sentiment in the market.
Also Read: Spot Ethereum ETF Coming This Week As SEC “Leaning Towards Approving”
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