The upcoming listing of spot ether exchange-traded funds (ETFs) in the United States is not expected to be hindered by the lack of staking, according to Ophelia Snyder, co-founder of digital asset manager 21Shares. While institutional investors are unlikely to be concerned about this feature, retail investors may be interested in having it included. This disparity in demand presents an opportunity for providers to offer tailored products catering to both groups.

The approval of spot ether ETFs by the Securities and Exchange Commission (SEC) is anticipated to be completed in the coming months, following the approval of key regulatory filings last month. To avoid potential regulatory hurdles, prospective providers have omitted staking provisions from their applications. Snyder highlighted that staked assets can impact liquidity, posing challenges if the unstaking period for ether extends to 22 days.

Despite suggestions that the absence of staking might dampen investor interest in ether ETFs, Snyder believes institutional investors will not be deterred. For these investors, effective management of withdrawal delays by asset managers is crucial. As a significant provider of spot bitcoin ETFs in the U.S. and exchange-traded products (ETPs) in Europe, 21Shares is well-versed in the institutional market. The company's ether ETP, which excludes staking, has assets under management of around $532 million.

Snyder also raised concerns about the tax treatment of staking rewards in the U.S., emphasizing the importance of clarity on this issue. Non-staked products, she suggested, would be more appealing to institutional investors, even if they are less popular among retail investors. As the market prepares for the listing of spot ether ETFs, providers must consider the diverse needs of their investors to maximize opportunities.

The listing of spot ether ETFs is expected to attract significant investment, with JPMorgan predicting inflows of $3 billion by the end of 2024, potentially doubling if staking were allowed. As the market evolves, providers must adapt to meet the demands of both institutional and retail investors, offering products that cater to their unique needs and risk management strategies.