The potential for staking within US-listed Ether spot ETFs is expected to significantly enhance institutional interest in Ethereum, with analysts predicting a transformative effect on capital inflows.
Markus Thielen, head of research at 10x Research, told Cointelegraph that staking would increase Ether ETF yields, making them far more attractive to professional investors.
He explained that this could “dramatically reshape the market” by adding additional yield on top of existing return opportunities.
While Ether ETFs are already approved, issuers are still awaiting the US SEC’s approval to incorporate staking mechanisms.
SEC Begins Considering Staking Proposals
Nate Geraci, president of NovaDius Wealth Management, said on X that recent acknowledgment of Nasdaq’s application to include staking in BlackRock’s iShares Ethereum ETF suggests it may soon be permitted.
If approved, it would allow institutional investors to earn staking rewards while maintaining regulatory compliance.
Thielen said that the added staking yield—roughly 3%—could lift total unleveraged returns for Ether ETFs to 10%, especially when combined with the 7% from basis trades between spot and futures markets.
With modest leverage, institutional players could potentially earn 20–30% annualized returns through arbitrage strategies, he added.
Yield Seen as Key Driver for Institutional Interest
Ryan McMillin, chief investment officer at Merkle Tree Capital, said yield is crucial to institutions such as pension funds.
“They prioritize steady and predictable income over uncertain capital gains,” McMillin said.
He also noted that staking yields would help reduce perceived volatility.
According to McMillin, Ether ETFs could now serve as both a diversification tool and a yield generator.
“Ether ETFs will now provide both diversification away from Bitcoin, as digital gold, to ETH as ‘stablecoin infrastructure’ but equally important, a yield which is not applicable for Bitcoin,” he said.
“A 3-5% yield will make ETH ETFs a compelling portfolio addition given its growth potential.”
Onchain Participation Set to Increase
Hank Huang, CEO of Kronos Research, said that staking approval would give institutions a compliant, hands-off way to earn onchain yield.
“Ether ETFs offering yield plus asset growth flips the switch on demand, boosting liquidity and sparking greater appetite for onchain participation,” he told Cointelegraph.
Huang believes that combining yield and growth potential could elevate Ether ETFs to a “new gold standard” for crypto investments.
He added that the right product—one that integrates staking and allows smooth exits—will accelerate Ethereum’s integration into traditional finance.