Hong Kong Considers to Allow Staking in Ether ETFs

As an experienced financial analyst, I believe this development in Hong Kong could be a game-changer for the crypto ETF market, particularly for Ethereum. The potential allowing of staking services through authorized platforms could significantly increase demand for these products, providing investors with an attractive source of passive income.

Hong Kong is considering allowing exchange-traded funds (ETFs) to stake Ether directly for investment, which could provide a new passive income stream previously unexplored by potential US ETF issuers.

Based on Bloomberg’s report, citing sources with knowledge of the matter, the Securities and Futures Commission in Hong Kong has reportedly engaged in talks with local cryptocurrency ETF firms regarding the provision of staking services through approved channels.

The Hong Kong Stock Exchange marked the initial debut of bitcoin and ether exchange-traded funds (ETFs) on April 30. Harvest Global, Bosera/HashKey, and China Asset Management (ChinaAMC) are responsible for managing these ETFs. Yet, there has been a lackluster response to ETFs in the market.

Should the prerequisite be met, enhancing staking rewards could boost market interest. The Asian financial hub stands to gain from an initial edge over the US, considering the heightened probability of approvals for spot-Ether ETFs in the States, irrespective of staking.

Investors can earn passive income by locking up their coins on the Ethereum network through a process called staking, which helps facilitate transaction validation. At present, this staking activity generates returns equivalent to approximately 4% of the annual reward.

This week, the SEC has deadline decisions approaching for VanEck and Ark Invest’s Ethereum ETF applications. The deadline for VanEck is set for this Thursday, while Ark Invest’s application will be evaluated on Friday. Among the companies vying for a spot in the Ethereum ETF market are Hashdex, Invesco, Fidelity, BlackRock, Grayscale, Franklin Templeton, and Bitwise.

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2024-05-23 21:08