Statement from BlackRock on Ethereum Potential: Success "Insufficient" Without This - Coin Bulletin

BlackRock stated that the (ETF) based on Ethereum is successful, but this success is lacking without the staking feature.

Robbie Mitchnick, Head of Digital Assets at BlackRock, stated at the Digital Asset Summit held on March 20 that the Ethereum ETF is a great success but emphasized that the lack of staking features is a significant shortcoming.

Mitchnick pointed out that staking is an important factor in terms of investment returns, and stated that the product cannot be "truly perfect" due to the absence of this feature in ETFs.

Ethereum's staking system was introduced in December 2020 as part of the transition from the Proof-of-Work (PoW) consensus mechanism to Proof-of-Stake (PoS) mechanism. As of February 2024, Ethereum staking deposits have reached around 85 billion dollars and accounted for 25% of the circulating supply. However, staking also comes with certain risks. Particularly, if a **validator (onaylayıcı) makes a wrong transaction, some of the staked ETH can be lost due to a penalty called "slashing". This presents an additional risk for investors.

(# The Future of Staking for ETFs

The inclusion of staking in Ethereum ETFs is not a simple process. Mitchnick stated that this feature will not only be realized with the approval of a new administration, but that many complex issues need to be resolved.

However, if these challenges can be overcome, they believe that Ethereum ETFs will receive greater interest. BlackRock's Ethereum ETF currently has approximately $2.3 billion in assets under management. However, this value remains quite low compared to the Bitcoin ETF, which has achieved a much greater success with nearly $48 billion in assets under management.

Mitchnick stated that it can be difficult to explain Ethereum to institutional investors, but this can be defined as a bet on the adoption of blockchain technology and innovation. He mentioned that in order to attract investors' interest, it is necessary to provide more concrete examples to discuss the potential and use cases of Ethereum.

The backing of Ethereum ETFs with staking could be a significant step as it offers investors the opportunity to earn additional income. However, there are still many legal and technical hurdles that need to be addressed for this to be realized.

)# New application from NYSE

NYSE Arca proposed a rule change that will allow Bitwise's Ethereum ETF to generate income through staking. This change could enhance the potential for Ethereum ETFs to provide extra returns to investors through staking. This development may help increase interest in Ethereum ETFs and could shift the preferences of cryptocurrency investors.