The staking trend for Ethereum ETFs is heating up. Robert Mitchnick, the head of digital assets at BlackRock, stated at a conference that allowing Ethereum ETF issuers to stake cryptocurrencies simultaneously could increase demand. Meanwhile, NYSE Arca has submitted a rule change proposal that, if approved, would allow Bitwise's Ethereum ETF to earn returns. Last year, the U.S. Securities and Exchange Commission (SEC) had a more hostile attitude towards cryptocurrencies, but now, as the government's stance on cryptocurrencies has become more friendly, ETFs could soon be able to stake. If the SEC approves the rule change, Ethereum ETFs will be able to generate income by holding cryptocurrencies. Although Ethereum ETFs have attracted billions of dollars in investment, their success pales in comparison to the historical performance of Bitcoin ETFs.

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Slowly but surely the drive to allow spot Ethereum exchange-traded funds to earn yield by staking the popular cryptocurrency is gaining momentum.On Thursday, while BlackRock's Head of Digital Assets Robert Mitchnick waxed optimistically about how allowing issuers of Ethereum ETFs to simultaneously stake the cryptocurrency could unlock added demand, NYSE Arca filed a proposed rule change that, if approved, would permit Bitwise's ether ETF to earn yield."There’s obviously a next phase in the potential evolution of [ether ETFs],” Mitchnick said at a conference on Thursday, according to CNBC. "A staking yield is a meaningful part of how you can generate investment return in this space, and all the [ether] ETFs at launch did not have staking."Last year, under the leadership of Gary Gensler, the U.S. Securities and Exchange Commission generally took a more antagonistic stance with regard to crypto and the possibility of allowing staking for Ethereum ETFs seemed a nonstarter. Issuers like BlackRock and Fidelity secured approvals and launched their ether ETFs in July 2024, but without staking.Now, with a more crypto-friendly government in place, the consensus appears to be that ETFs could soon be allowed to stake.If the SEC approved a rule change and allowed Ethereum ETFs to stake and earn yield, they should able to also generate revenue by holding the cryptocurrency. NYSE Arca's filing on behalf of the Bitwise ether ETF on Thursday follows Grayscale, 21Shares and Fidelity filing similar proposals.While cumulatively spot Ethereum ETFs have attracted billions of dollars in investment, their success pales in comparison to the historic performance of spot Bitcoin ETFs.As a point of comparison, BlackRock's ether ETF has about $2.3 billion in assets under management versus the firm's bitcoin ETF which has nearly $48 billion in AUM, according to The Block Data Dashboard."There are a lot of fairly complex challenges that have to be figured out, but if that can get figured out, then it’s going to be sort of a step change upward in terms of what we see the activity around those products is," Mitchnick said.

The trend of Ethereum ETF staking is heating up, as the NYSE submits an application for the Bitwise fund.