- Mike Novogratz projects that the US could follow Hong Kong’s plan and approve ETH ETF staking.
- Novogratz expects US ETH ETF staking in two years.
- However, regulatory and Ethereum concentration risks still exist for ETH ETF staking.
Mike Novogratz predicts a shift in the US SEC’s stance on ETH ETF staking within the next two years, despite existing regulatory and concentration risks.
SEC’s Staking Stance and Risks
The US SEC has always opposed crypto staking. Last year, Kraken settled with the agency for $30 million and shuttered its US staking operation.
Additionally, potential US spot Ethereum ETF issuers dropped previous ‘staking provisions’ on the 19b-4s forms before the SEC approved them on 23rd May. That indicated that the ‘staking provisions’ could have been compliance hurdles for the approvals.
Besides, there have been worries that US spot ETH ETF staking could increase the Ethereum network’s centralization risks.
According to an S&P Global report, ETH ETF staking could be positive and negative. On the positive side, S&P Global noted,
“The participation of institutional custodians could reduce the current concentration on the Lido decentralized staking platform.”
Despite shedding part of its market share on ETH staking, Lido still dominated the market at 28%, followed by Coinbase at 13% and Ether.Fi at 3% amongst the top three leaders.
On the negative, the S&P Global warned that,
“It may also introduce new concentration risk, particularly if a single entity is chosen to stake the bulk of ETH included in these ETFs.”
However, according to a recent Bloomberg report, Hong Kong planned to approve the spot ETH ETF staking.
Although there was no official timeline for the plan, market watchers believe it could bolster demand for Hong Kong’s spot ETH ETFs despite their lukewarm debut in late April.
It remains to be seen whether the US regulator will follow Hong Kong’s lead and make a U-turn on staking and its potential impact on the security of the Ethereum network.
Conclusion
Mike Novogratz’s prediction of US ETH ETF staking approval within the next two years highlights a potential shift in the regulatory landscape. While the SEC’s current stance and the risks associated with Ethereum concentration pose challenges, the evolving global regulatory environment, as seen in Hong Kong, may pave the way for future developments. Investors and market participants should stay informed and prepared for potential changes in the crypto staking ecosystem.
