Thomas Daniels
Bloomberg ETF analyst Eric Balchunas asserts that the approval of staking for U.S. spot Ethereum exchange-traded funds (ETFs) will have minimal impact on investor inflows unless Ether (ETH) experiences a prolonged price rally. Despite the potential benefits of staking, Balchunas emphasizes that without a sustained upward trend in ETH’s price, the attractiveness of these ETFs remains limited.
Since their U.S. debut in July 2024, spot Ethereum ETFs have struggled to attract significant inflows, a stark contrast to the performance of spot Bitcoin ETFs. The latter saw Bitcoin (BTC) reach new all-time highs within two months of their January 2024 launch. Balchunas attributes the lackluster performance of Ethereum ETFs to the absence of a consistent price rally, noting that ETH’s price declined sharply post-launch, making recovery challenging.
A notable exception occurred in December 2024, following Donald Trump’s election victory in November, which sparked a crypto market rally. During this period, ETH surged 71% to $4,107, leading to a 19-day streak of positive inflows into spot Ether ETFs, totaling approximately $2.44 billion, according to Farside data. However, ETH has since entered a downtrend, currently trading around $1,809, a 56% decline from its December peak.
Balchunas emphasizes that for inflows to pick up again, ETH would need a “multimonth run” paired with a “strong narrative.” He states, “It needs something that is more than just a good week here and there.” Without sustained performance, the approval of staking is unlikely to significantly impact ETF inflows.
The U.S. Securities and Exchange Commission (SEC) has yet to approve staking for Ether ETFs, despite multiple requests from issuers earlier this year. Bloomberg ETF analyst James Seyffart indicates that while early approval is possible, the final deadline for a decision is at the end of October, with potential intermediate deadlines in late May and late August.
In summary, while staking could enhance the appeal of Ethereum ETFs, its impact on inflows is contingent upon a sustained rally in ETH’s price. Without such a rally, investor interest in these ETFs is likely to remain subdued.
