BlackRock is making a significant move into the crypto sector by filing to add Ethereum (ETH) staking to its ETF. This decision could impact the staking market and institutional investments.
BlackRock and ETH Staking
BlackRock has submitted a request to the U.S. Securities and Exchange Commission (SEC) to allow staking in its iShares Ethereum ETF. If approved, the fund will provide investors with access not only to ETH price movements but also to income generated from staking. This initiative follows new SEC guidance defining staking rewards as taxable income.
New Interest in Staking
Following the SEC's change in stance, institutional interest in ETH staking has surged. Treasuries-focused companies have collectively purchased over 540,000 ETH worth around $1.6 billion. In June, 28% of the circulating ETH was locked in staking, increasing to over 36 million ETH by July. This growth shows a shift towards regular income from cryptocurrencies.
SEC Decision Delayed
The SEC has also extended its timeline for deciding on in-kind redemptions for Bitwise's ETFs, which would allow cryptocurrency redemption instead of cash. While this creates tax advantages, it indicates ongoing regulatory uncertainty. Opinions on the influence of institutional interest in crypto are divided: some see it as a positive step, while others warn of potential risks.
The actions of BlackRock and other investment firms could significantly alter the crypto and staking markets, but concerns remain about institutional investments affecting the principles of the cryptocurrency community.
