Ethereum ETF Staking Needs a Long-Term Rally to Boost Inflows, Experts Say

Bloomberg ETF analyst Eric Balchunas states that simply approving staking for spot Ether ETFs in the United States will likely have minimal effect on attracting investment unless Ether experiences a prolonged and sustained rally. He noted that after the launch of Ether ETFs last year, the price of ETH declined significantly, unlike Bitcoin ETFs, which reached new all-time highs within two months of their launch. For inflows to increase again, Ether would need to demonstrate a multi-month upward trend coupled with a compelling narrative.

Balchunas explained that enabling staking for Ether ETFs might only have a limited impact on inflows unless the price of ETH maintains a strong rally over several months. He mentioned that the recent weak inflows since July are primarily due to Ether's failure to sustain a long-term rally. During a notable rally in December, when ETH's price surged, inflows increased correspondingly. The rally was triggered by broader market events, such as Donald Trump's election victory in November, which led to a crypto market surge, causing ETH to rise 71% to $4,107 in December.

Following that peak, Ether entered a downward trend, falling 56% to around $1,809 at the time of the report. Balchunas emphasized that for inflows to recover, Ether needs a strong, multi-month rally paired with a convincing narrative, rather than just short-term gains. He also pointed out that after the launch of Ether ETFs, the price declined rapidly, making recovery difficult, unlike Bitcoin ETFs, which achieved new highs shortly after their launch.

Currently, US issuers are awaiting approval from the SEC to allow Ether ETFs to offer staking features, with potential decisions expected by late October. Interim deadlines are anticipated in May and August.