The U.S. Securities and Exchange Commission (SEC) has recently delayed decisions on staking and in-kind redemption for Ethereum (ETH) exchange-traded funds (ETFs). The regulator has extended the deadline for the staking application on two Grayscale spot ETH ETFs to June 1, 2025. Other companies like Bitwise, VanEck, and BlackRock have also applied for similar staking provisions for their ETH ETF products. BlackRock’s head of digital assets, Robert Mitchnick, has acknowledged the benefits of staking for their products, even though they have not officially applied yet.
In addition to staking, the SEC has also postponed decisions on in-kind creation and redemption for both ETH and Bitcoin (BTC) ETFs. The in-kind method allows for the use of underlying assets like ETH or BTC for redemption, avoiding taxable events and enhancing liquidity. The SEC pushed the deadline for the in-kind decision to June 3, 2025. The regulator’s crypto task force has been engaging in discussions with key players in the industry, such as Jito, MultiCoin Capital, and BlackRock, regarding crypto ETF staking and in-kind redemption.
Despite these developments, the market sentiment towards ETH has not shown any significant change. Coinglass data indicates that Open Interest (OI) in ETH futures has been decreasing since February, dropping from nearly $26 billion to below $20 billion. This ongoing bearish sentiment has been reflected in ETH’s price chart, where a bearish rising wedge pattern has emerged. If validated, this pattern could potentially drag ETH below $1500 before finding strong support. However, reclaiming the $1.8K level could signal a bullish advance for ETH.
In conclusion, the SEC’s decision to delay ETH ETF staking and in-kind redemption has led to uncertainty in the market. While key players in the industry are actively seeking provisions for staking and in-kind redemption, the regulatory landscape continues to remain unclear. Traders and investors need to closely monitor developments in the ETH market and be prepared for potential price movements based on regulatory decisions and market sentiment. Despite the current bearish trend in ETH, reclaiming key price levels could lead to renewed bullish momentum in the future.
