- The SEC now lets crypto ETFs use in-kind creations for faster and cheaper trades.
- Nate Geraci says Ethereum staking approval may come before new spot crypto ETFs.
- SEC approval of ETH staking in ETFs could spark a demand surge, rivaling Bitcoin fund inflows.
The U.S. Securities and Exchange Commission on Tuesday approved in-kind creations and redemptions for crypto asset ETFs, marking a shift from prior rules. Previously, all approved spot Bitcoin and Ether ETPs allowed only cash-based creations and redemptions. This new decision permits authorized participants to exchange crypto assets directly, rather than cash, to create or redeem ETF shares.
This development represents a procedural change that is likely to improve trading efficiency for crypto asset ETFs. As a result, it may reduce costs and narrow tracking errors that had affected earlier funds.
On the same day, Nate Geraci announced a related development regarding staking in Ethereum ETFs. “One item left on my checklist from November… Staking in spot ETH ETFs,” he posted. His comment came after the SEC formally acknowledged Nasdaq’s 19b‑4 filing for BlackRock’s iShares Ethereum Trust to offer staking.
Staking May Precede Any New Spot Crypto ETF
Geraci suggested that staking may be next on the SEC’s regulatory agenda, possibly arriving before any additional spot crypto ETF approvals. “My guess? This is next on the SEC’s hit list. Sooner rather than later. Before any additional spot crypto ETFs,” he wrote. His statement has since sparked speculation across the investment community.
The SEC’s acknowledgment of Nasdaq’s 19b‑4 filing suggests an accelerated review timeline. This could potentially allow staking features in the iShares Ethereum ETF, a first for spot crypto funds. For Geraci, who has monitored ETF developments since late 2023, the staking decision represents the last unchecked item on his checklist.
The ETF industry has been anticipating further crypto innovations. While XRP has been considered a frontrunner for the next spot ETF, Geraci’s remarks suggest staking may take precedence.
Institutional Focus Grows as Staking Nears Approval
Staking allows ETH holders to lock their assets on the blockchain and receive yield, often ranging between 3.2% and 3.5% annually. Approval of staking would give institutional investors a yield-generating vehicle within a regulated framework, which may attract increased capital inflows. Analysts believe ETH ETF demand could soon match or even exceed Bitcoin ETF inflows if staking becomes widely available.
In fact, ETF analyst James Seyffart noted that REX Shares has already filed proposals for Solana and Ether staking ETFs under the 40-Act structure. “These ETFs are structured as C-Corps. Which is very rare in the ETF world,” Seyffart wrote in a May 30 post. These funds are designed to avoid the traditional 19b-4 process, which could speed up their potential launch.
REX’s filing states that the fund will be treated as a C-corporation for tax purposes. This means it will incur both current and deferred tax obligations, which will be reflected in the fund’s net asset value.
Related: SEC Approves In-Kind Crypto ETFs for Bitcoin and Ether
Could a Unified SEC Decision on Staking Come Before 2026?
The SEC has yet to rule on Bitwise’s request to add staking to its Ether ETF, originally filed in May. At that time, Seyffart explained that the SEC often uses the full period to evaluate 19b-4 applications. Thus, any delay was anticipated as part of the normal review cycle.
Still, questions remain: Could the SEC issue a sweeping decision that covers all pending staking applications? And if so, when will that happen?
Industry analysts now believe a unified decision may arrive as early as Q4 2025. This would precede BlackRock’s April 2026 deadline for final SEC action. However, the timeline depends on the Commission’s capacity to process the filings efficiently while upholding compliance standards. If staking is approved soon, it could reshape U.S. Ethereum ETFs and introduce the first regulated, yield-bearing Ether investment vehicle to mainstream markets.
