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ETH and SOL staking ETFs let investors earn crypto rewards easily without managing wallets.
The SEC’s clearer stance may soon allow staking ETFs in the U.S., following Europe and Canada.
Staking rewards offer extra income but come with variable returns based on network factors.
A new wave of crypto investment may be just around the corner. Industry experts believe the U.S. could soon see the launch of staking-based ETFs (Exchange-Traded Funds) for Ethereum (ETH) and Solana (SOL). These ETFs would give everyday investors access to crypto rewards called staking yields without having to manage digital wallets or complex tech setups.
Ethereum's transition to a proof-of-stake system means that users can earn rewards by staking their ETH to assist in running the network. But existing US approved Ethereum ETFs offered by firms such as BlackRock and Fidelity don't provide these rewards. Investors who own ETH via these funds are missing passive income.
Also Read: Canada Beats US to Launch First Solana ETFs With Staking
The primary concern is regulatory. The US Securities and Exchange Commission (SEC) has not definitively determined whether staking is to be considered similar to a traditional investment contract. Due to that ambiguity, ETF issuers have avoided incorporating staking into their offerings, despite last year's approval of spot ETH ETFs.
While the US is still catching up, other places are racing ahead. In Europe, already a firm VanEck and Bitwise offer SOL staking products. They are listed on major exchanges and are already attracting large investors' attention.
Canada is also making moves. Asset manager 3iQ has partnered with Sol Strategies to launch a Solana staking ETF. The plan is to use up to one-third of the fund’s assets to earn SOL staking rewards using secure, institutional-level systems. If approved, this would be Canada’s first ETF of its kind.
Also Read: Bitcoin Slips in June as ETF Inflows Cool and Bears Loom
There are signs that the US may be opening up to staking ETFs. Recently, the SEC clarified that staking on its own may not qualify as a security. This shift, along with a more crypto-positive mood in Washington, is giving investors and asset managers hope.
More accommodating regulation would make approvals for staking-inclusive ETFs a possibility. This would allow the US to catch up with Europe, where the products already trade.
Staking enables investors to make additional income over and above price appreciation. The returns are derived from assisting in the validation of blockchain transactions. Yet the returns earned from staking aren't predetermined. It is a function of factors such as how many individuals are staking, network usage, and technical efficiency.
Advanced strategies are employed by some traders to profit from unstaked versus staked ETH prices. But for the average investor, an ETF that enables staking would make things easy, just purchase the fund and automatically get exposure to staking rewards.
Europe already has ETH and SOL staking ETFs. Canada is set to introduce its first Solana staking ETF. In the United States, industry giants such as BlackRock, Fidelity, and VanEck will soon file for ETH and SOL staking ETFs once the SEC's stance becomes clearer. Experts expect these products to launch as early as late 2025 if regulatory development continues.
Staking ETFs have the potential to reshape crypto investing. By offering staking rewards through regulated, easy-to-access funds, they combine the benefits of decentralized technology with the familiarity of traditional finance. For investors, it’s a way to earn passive income without handling the technical side of crypto. And for the crypto market, it could mean a big step toward wider acceptance and growth.
