Invesco Galaxy Ethereum ETF Delayed Until September!

The United States Securities and Exchange Commission (SEC) has officially postponed its decision on the proposed Invesco Galaxy Ethereum ETF staking feature until September 25. It’s leaving investors and issuers waiting for clarity. 

While Ethereum (ETH) continues to gain traction among institutional investors, regulatory hurdles remain, especially when it comes to incorporating staking functionality into a publicly traded investment vehicle.

SEC Postpones Staking Proposal Review

On July 30, the SEC announced that it would extend the review period for a proposed rule change submitted by Cboe BZX Exchange, which seeks to allow staking within the Invesco Galaxy Ethereum ETF. 

The proposal, originally filed on June 9 and later amended on June 23, aims to introduce Ethereum staking into the ETF framework. If approved, the fund would be permitted to earn staking rewards by participating in Ethereum’s proof-of-stake consensus mechanism.

However, the SEC stated that more time is needed to assess the potential legal, financial, and technical implications of such a feature. This delay aligns with the regulator’s broader pattern of cautious consideration when dealing with cryptocurrency-based investment products.

Read also: Blackstone (BX) Price Analysis

Why Staking Matters for an Ethereum ETF

Ethereum operates on a proof-of-stake (PoS) model, where holders of ETH can stake their coins to help validate transactions on the network and earn rewards in return. 

For investors, incorporating staking into an ETF offers the potential for additional income on top of Ethereum price appreciation. 

This added yield could make an Ethereum ETF significantly more appealing, particularly to institutions looking for passive crypto exposure with extra returns.

Under the current regulations, spot Ethereum ETFs are only allowed to hold ETH passively. They do not engage in staking, which means they miss out on the opportunity to generate staking rewards. 

The Invesco Galaxy proposal could represent a key shift if approved, as it would allow an ETF to function more like a direct holder who also benefits from the network's staking economics.

Read also: SoFi Stock Surges After Strong Q2 Earnings and Raised Outlook

A Broader Regulatory Pattern

This is not the first time the SEC has delayed a decision related to Ethereum staking. Other major firms, such as Grayscale and Bitwise, have also submitted proposals to integrate staking into their ETF products. 

All have faced similar delays, reflecting the regulatory complexity surrounding staking activities.

Key concerns include how staking rewards should be classified, whether as income, dividends, or something else, and what risks they may introduce for investors. 

The SEC is also examining how staking affects fund custody arrangements, investor protections, and overall market stability.

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FAQ

What is the best ETF for Ethereum? 

The iShares Ethereum Trust (ETHA) has attracted the most investments among Ethereum ETFs, drawing 42% of all new funds in just the past month. Its strong performance is largely due to BlackRock's backing, which gives it significant institutional credibility and vast financial resources.

What is the BlackRock Ethereum ETF called? 

The BlackRock Ethereum ETF is called the iShares Ethereum Trust ETF (ETHA).

Is there a 2x Ethereum ETF? 

Yes, there is a 2x Ether ETF. It aims to provide investment results that are two times (2x) the daily performance of Ether, before accounting for fees and expenses.

Is there a 3x Ethereum ETF? 

Yes, there is an Ethereum -3x leveraged ETF. This exchange-traded product tracks three times the inverse of Ethereum's daily return.

Does ETH have an ETF? 

Yes, Ethereum now has ETFs. Monthly inflows into Ethereum ETFs have reached $4.7 billion, with ETHA showing the most volume and growth. This rapid growth is fueled by increasing demand from large institutions and growing investor confidence in Ethereum's long-term future. BlackRock launched ETHA in late 2023, choosing Coinbase Prime as its custodian.

What ETF holds Bitcoin and Ethereum? 

The BETH | Bitcoin & Ether Market Cap Weight ETF by ProShares is an ETF that holds both Bitcoin and Ethereum, weighted by their market capitalization.