Bitwise Ethereum ETF Amendment Could Be a Milestone for ETH Staking

How It Would Work: Custodians, Providers, and Yield Treatment

According to the filing, Bitwise would work with regulated custodians and third party staking providers to ensure security, compliance, and operational integrity. Staking rewards would be treated as income to the fund and reflected in the net asset value, making this a more comprehensive vehicle for ETH exposure.

The Argument: Ethereum's Decentralization as a Legal Lever

The amendment emphasizes Ethereum’s decentralized and globally distributed network, echoing the same rationale that helped pave the way for the approval of spot Bitcoin and Ethereum ETFs earlier this year. By allowing staking, NYSE Arca and Bitwise aim to align the ETF more closely with how ETH is actually used and rewarded within its native ecosystem.

The Gray Zone: Regulatory Challenges Around Staking

But staking remains a gray area in the regulatory landscape.

While the SEC has become more accepting of crypto based ETFs, staking functionality has consistently raised concerns.

In February 2023, the SEC took action against Kraken for offering staking services it deemed unregistered securities. Kraken paid a $30 million settlement and, as part of that agreement, discontinued its original U.S. staking program.

With the appointment of Paul S. Atkins as the 34th Chairman of the U.S. Securities and Exchange Commission (SEC) on April 21, 2025, many believe this would be a turning point for the regulatory landscape surrounding digital assets, particularly staking services. Atkins, known for his pro-innovation stance, has signaled a shift from the SEC's previous enforcement-heavy approach to a more collaborative and clear regulatory framework for cryptocurrencies.

Against this backdrop, industry players are renewing their push for staking integration in regulated products. Grayscale, for instance, has argued that the SEC’s hesitation has already cost investors an estimated $61 million in missed staking rewards—highlighting the tangible opportunity cost of regulatory delays. 

What Comes Next: The SEC Review Process Begins

The proposal is now in the SEC’s hands, triggering a review period that could take several months before a final decision is reached. While the outcome remains uncertain, approval would make the Bitwise Ethereum ETF the first in the U.S. to offer both spot ETH exposure and staking income.

If approved, it could pave the way for more staking-enabled ETFs tied to other blockchain networks. More broadly, it would mark a significant step toward integrating core DeFi functions—like staking—into the regulated framework of traditional finance, giving institutions clearer access to crypto-native yield.

NYSE Arca’s move reflects growing comfort among traditional market players with crypto’s evolving utility, suggesting staking may soon join spot exposure as a standard ETF feature.

About the Author

Eric Pan has nearly a decade of experience across institutional, retail, and crypto finance, with roles at State Street, Sculptor Capital Management, Betterment, and leading digital asset custodians Anchorage Digital and BitGo. Now a finance content creator, he draws on his traditional finance roots and crypto expertise to help demystify markets, investing, and digital assets for a broader audience. A native New Yorker, Eric brings a grounded, insider perspective to the evolving world of finance.

Disclaimer

Please note that this article reflects the author's personal views and does not represent the opinions of the publication or its affiliates. It is for informational purposes only and does not constitute investment advice. It is essential to seek guidance from a registered financial professional before making any investment decisions.