Institutional Demand for Ether ETFs Won't Be Dampened by Lack of Staking, Says 21Shares

Institutional investors are unlikely to be deterred by the absence of staking in upcoming U.S. spot ether (ETH) ETFs, according to Ophelia Snyder, co-founder of 21Shares. While retail investors might prefer staking for its potential returns, institutional investors prioritize liquidity and risk management, recognizing the potential challenges associated with staking, such as extended unstaking periods and tax uncertainty. Snyder emphasizes that staking could impact liquidity due to variable unstaking periods, ranging from 6 to 22 days, and the lack of clear tax guidelines for staking rewards in the U.S. makes it less appealing to institutions. Despite this, 21Shares remains bullish on the institutional demand for spot ether ETFs, given their existing success in the European market with staking-enabled ETPs. The company is also applying for a U.S. spot ether ETF that explicitly excludes staking to cater to institutional preferences. The potential for separate products catering to both institutional and retail investors is being explored, suggesting a future market landscape with diverse options for ETH ETF investors.