SEC delays Ethereum ETF staking verdict – Here’s why and what next?

• SEC pushed the decision on ETH ETF staking and in-kind redemption to June 2025. 
• The regulator has met with key players, including BlackRock, regarding the above issues. 

The U.S. Securities and Exchange Commission (SEC) has delayed decisions on staking and in-kind redemption for Ethereum [ETH] ETFs (exchange-traded funds). 

The agency sought more time on the staking application on two Grayscale spot ETH ETFs. As a result, the deadline has been extended to the 1st of June. The issuer made the application in February.

What’s next for ETH ETFs

Others like Bitwise, VanEck, 21Shares, Fidelity, Invesco Galaxy, and Franklin Templeton had applied for similar staking provisions for their respective ETH ETF products. 

As of this writing, only BlackRock has not applied for the same. But Robert Mitchnick, BlackRock’s head of digital assets, had publicly acknowledged the benefit of staking for the products. 

The regulator also delayed decisions on in-kind creation and redemption for ETH ETFs and BTC ETFs. In-kind redemption, unlike current cash settlements demanded by Gary Gensler-led SEC, ensures the use of underlying assets like ETH or BTC.  

The in-kind method avoids taxable events and enhances liquidity. The regulator pushed the in-kind decision deadline to 3rd June. 

That said, the SEC’s crypto task force has held roundtable discussions with key players, including Jito, MultiCoin Capital, and BlackRock, about crypto ETF staking and in-kind redemption. 

Meanwhile, the update didn’t spur any change in ETH’s speculative interest. According to Coinglass data, Open Interest (OI) has been on a decline since February, dropping from nearly $26B to below $20 billion.

This meant that the bearish sentiment persisted even after the update. 

On the 4-hour price chart, ETH chalked a bearish rising wedge, which could drag it below $1500 again if the pattern is validated. However, reclaiming $1.8K could allow bulls to advance further.