- The NYSE has filed with the SEC to list a Bitwise Ethereum ETF that includes staking features.
- The proposed ETF would offer Ethereum staking rewards without requiring investors to run wallets or validators themselves.
- The ETF faces risks such as market manipulation; approval could shape future crypto ETFs.
On March 20, 2025 at 12:21 PDT, the New York Stock Exchange (NYSE) submitted a proposal to the U.S. Securities and Exchange Commission (SEC) to list and trade shares of the Bitwise Ethereum ETF (ETHW) that would provide staking rewards.
The filing, made under Form 19b-4, seeks to modify the Bitwise Ethereum ETF that was approved on May 23, 2024, to permit staking of Ethereum (ETH) held by the Trust.
If approved, the ETF could be a pioneering product in the United States by combining a traditional exchange-traded investment vehicle with blockchain staking, potentially broadening access to Ethereum staking rewards.
What is staking?
Staking is a core feature of Ethereum’s proof-of-stake consensus, which replaced the energy-intensive proof-of-work model in 2022.
In staking, users lock up a minimum of 32 ETH to validate transactions and help secure the network, earning rewards in return—commonly in the range of about 3–5% annually.
While staking strengthens the Ethereum ecosystem, it typically requires technical know-how and hands-on management, creating a barrier for many potential participants.
How the proposed Ethereum ETF would work
The proposed Bitwise Ethereum ETF with staking aims to bridge that gap by embedding staking within a regulated, exchange-traded fund.
Bitwise, the ETF sponsor, would stake a portion of the Trust’s ETH holdings through approved staking providers, such as custodians or affiliated service providers. This arrangement is intended to keep staked ETH secure while maintaining liquidity to meet investor redemptions.
Unlike some staking models criticized by regulators, the ETF would avoid “delegated staking” or “staking-as-a-service” arrangements, aligning the proposal with regulatory expectations to improve the likelihood of approval.
Benefits for investors
The ETF could change how investors access Ethereum. By delivering staking rewards through a familiar investment product, the NYSE-listed fund would remove the need for individuals to manage private wallets or operate validators.
Investors would receive exposure to both Ethereum price movements and staking yields within a fund that trades daily on the NYSE—offering greater liquidity compared with direct staking’s lock-up periods.
This accessibility could attract both institutional and retail investors, potentially increasing demand for Ethereum and influencing its market price.
Challenges and regulatory risks
Despite its potential, the proposal faces hurdles. The SEC remains cautious about crypto products and regularly points to risks such as market manipulation, fraud, and investor losses.
The agency is likely to scrutinize how staking could affect market stability and whether Bitwise can adequately protect investors.
Operational risks are also present: “slashing” penalties imposed on validators for errors or downtime could reduce returns, and balancing staked and unstaked ETH to preserve liquidity adds operational complexity. Bitwise must convincingly address these issues to obtain approval.
Potential impact of the SEC’s decision
The outcome of this filing could influence the broader crypto and financial landscape. Approval would mark a milestone and could open the door for ETFs tied to other proof-of-stake assets such as Solana or Cardano.
It could also signal increasing regulatory acceptance, helping to integrate cryptocurrencies into mainstream investment. Conversely, a rejection could reinforce regulatory skepticism and delay the incorporation of crypto-native features into traditional markets.