As a seasoned researcher with a keen interest in the dynamic world of cryptocurrencies, I find myself intrigued by the potential of United States Ethereum exchange-traded funds (ETFs) featuring staking yield. The prospect of a crypto-friendly leadership under President Trump 2.0 and the promise to make the US the “world’s crypto capital” certainly adds an exciting twist to this narrative.
According to a recent report by Bernstein Research, it appears that Ethereum exchange-traded funds (ETFs) in the United States could potentially offer staking rewards in the near future.
Berstein stated that with the anticipated change to a more cryptocurrency-friendly Securities and Exchange Commission under a potential second term for Trump, it’s expected that Ethereum staking yields may receive approval.
Participating in staking means securing Ether (ETH) as security with a verifier within the Ethereum blockchain system. By doing so, stakers receive ETH returns from transaction fees and other incentives; however, they face the potential penalty of losing their pledged ETH if the validator acts inappropriately or incorrectly, which is known as “slashing”.
Currently, by December 2nd, staking Ethereum (ETH) is estimated to generate around a 3.1% return per year (annualized percentage yield), calculated and expressed in ETH, as reported on StakingRewards.com.
According to Bernstein’s statement, it’s predicted that the return (or yield) on Ethereum could potentially increase from its current level to between 4% and 5%, given higher levels of activity on the Ethereum blockchain network.
Crypto-friendly US leadership
In July, the Securities and Exchange Commission permitted U.S. trading of Ethereum spot ETFs, yet it barred these funds from earning additional returns through Ethereum staking, despite repeated requests from ETF providers like Fidelity, 21Shares, and Franklin Templeton.
Currently, it’s being reported that Donald Trump, who has expressed a desire to make the U.S. a leading nation in cryptocurrency, is considering appointing individuals with favorable views towards cryptocurrencies to lead financial regulatory bodies when he assumes office on January 20, 2025.
This could open the door to staking being approved sooner than previously thought, Bernstein said.
Ether’s risk-reward profile
According to the analysts, they view Ethereum (ETH) as a promising investment prospect, noting increased investor attention following a stretch where it lagged behind Bitcoin (BTC) in performance.
According to Bernstein’s statement, the foundational aspects of Ethereum appear robust, and the recent surge in ETF investments suggests a resurgence of investor curiosity.
2024 marked a significant shift in investor sentiment towards Ether investment funds as they recorded unprecedented net inflows amounting to $2.2 billion, exceeding the previous record set by cryptocurrencies in 2021 ($2 billion). This optimistic trend was highlighted by CoinShares.
According to Matthew Sigel, VanEck’s head of digital asset research, it is projected that the Ethereum network could produce up to $66 billion in annual cash flow without expenditure by 2030, potentially pushing the value of each Ethereum token up to $22,000.
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2024-12-02 22:29