- Cboe BZX Exchange has filed a proposal with the U.S. Securities and Exchange Commission (SEC) to allow staking within the 21Shares Core Ethereum ETF
- If approved, this would mark the first U.S. ETF to incorporate Ethereum staking, potentially offering investors additional yield opportunities
- The SEC’s decision on this proposal is anticipated by late October 2025
Digital assets could be about to further embed themselves into the traditional markets after the Cboe BZX Exchange submitted a proposal for a staked ether ETF. The company is seeking permission from the SEC to enable staking for the 21Shares Core Ethereum ETF, an initiative which aims to allow the ETF to stake its Ethereum holdings, thereby generating staking rewards and potentially enhancing investor returns. The SEC’s ruling on this groundbreaking proposal is expected by the end of October 2025.
Unchartered Territory for the Cryptosphere
The Cboe filed its Form 19b-4 with the SEC yesterday, which seeks to amend the operational framework of the 21Shares Core Ethereum ETF, allowing it to participate in Ethereum staking. Staking involves locking up ETH tokens to support network operations in return for earning additional tokens as rewards.
If approved, this would be the first instance of a U.S. ETF incorporating cryptocurrency staking into its investment strategy. It would also mark a fascinating departure from the comments made by former SEC Chair Gary Gensler, who opined that ETH might be considered a security shortly after it switched from proof-of-work to proof-of-stake in September 2022.
Taking Staking Mainstream
By integrating staking, the Cboe ETF aims to enhance its performance by capturing the rewards associated with Ethereum’s proof-of-stake mechanism. The filing emphasizes that “allowing the Trust to stake its Ether would benefit investors and help the Trust to better track the returns associated with holding Ether.” This approach seeks to provide ETF investors with returns more closely aligned with direct Ethereum ownership.
The SEC has previously approved Ethereum ETFs without staking features, citing regulatory concerns, but this proposal reflects a shift towards integrating more complex cryptocurrency mechanisms within traditional financial products. Following the announcement, Ethereum’s price experienced a notable increase fo around 8%, reflecting market optimism about the potential approval of the staking feature.
The proposal by Cboe BZX Exchange to incorporate staking into the 21Shares Core Ethereum ETF represents a pivotal moment in the evolution of cryptocurrency investment vehicles, signaling a deeper integration of blockchain technology within mainstream financial markets.
The SEC is due to rule on the proposed rule change in October.
