Originally published on: December 02, 2024
The latest report from Bernstein Research suggests that United States Ethereum exchange-traded funds (ETFs) are on the verge of introducing staking yield into their offerings. The research firm believes that with a new, crypto-friendly Securities and Exchange Commission under the potential Trump 2.0 administration, ETH staking yield is likely to receive approval.
For those unfamiliar, staking involves locking up Ether as collateral with a validator on the Ethereum blockchain network. In return, stakers earn ETH payouts from network fees and rewards, presenting an opportunity for passive income. However, stakers also face the risk of “slashing,” where they could lose their ETH collateral if the validator behaves improperly.
As of the latest data from Dec. 2, staking ETH yields approximately 3.1% annualized percentage returns (APR), according to StakingRewards.com. Bernstein Research anticipates that ETH yield could further increase to 4-5% with heightened activity levels on the Ethereum blockchain network.
The possibility of staking being approved sooner than expected is driven by the potential appointment of crypto-friendly leaders in key regulatory positions by incoming US President Donald Trump, who has expressed a desire to establish the US as the “world’s crypto capital.”
Additionally, Bernstein Research sees ETH as an attractive investment opportunity, backed by growing investor interest following a period of underperformance compared to Bitcoin. The recent surge in net inflows to Ether investment funds, totaling $2.2 billion in 2024, surpassing the previous record set in 2021, indicates a significant shift in sentiment towards ETH.
According to Matthew Sigel, head of digital asset research at VanEck, the Ethereum network has the potential to generate up to $66 billion in annual free cash flow by 2030, which could drive the price of spot ETH as high as $22,000 per token.
With the evolving landscape of crypto investments and the promising outlook for Ethereum, the incorporation of staking yield in US Ether ETFs could mark a significant milestone for investors seeking to capitalize on the potential growth of the Ethereum network. Stay tuned for more updates on this developing trend in the crypto market.