In a recent interview with CoinDesk, Ophelia Snyder, co-founder and president of Switzerland-based crypto ETP issuer 21Shares AG, shared her insights on the potential impact of U.S. spot ether (ETH) exchange-traded funds (ETFs) not staking the underlying token to generate additional returns. Snyder suggests that institutional investors are unlikely to be concerned about this lack of staking, even though retail investors would be eager to have this feature built into the ETFs.
According to a report by Jamie Crawley for CoinDesk published yesterday, this divergence in preferences between institutional and retail investors opens up the possibility for providers to offer separate, tailored products to cater to the needs of both groups. Snyder’s perspective comes as the U.S. Securities and Exchange Commission (SEC) appears poised to approve spot ether ETFs in the coming months, following the agency’s approval of key regulatory filings from applicants last month.
Snyder highlights that staked assets can have an impact on liquidity, citing the potential for ether’s unstaking period to extend to 22 days. This liquidity concern is a crucial consideration for institutional investors, who would likely prefer to see a proven track record of asset managers effectively navigating withdrawal delays and the associated risk management challenges.
The absence of staking in Ether ETFs has raised questions about potential dampening of investor appetite. However, Snyder believes that institutional investors will not view this as a significant issue. She argues that if staking were a priority for these investors, they would expect to see evidence of asset managers successfully executing against the wide range of unstaking periods, which can vary from six to nine days and gradually extend to 22 days.
Snyder emphasizes that managing a portfolio with staked assets requires careful monitoring of data inputs to maximize returns while minimizing the risk of liquidity issues. As one of the largest crypto ETP issuers in Europe and an applicant for a U.S. spot ether ETF that excludes staking, 21Shares has a deep understanding of the institutional market’s preferences.
Another factor to consider is the tax treatment of staking rewards in the U.S., which remains unclear. Snyder suggests that offering non-staked products would be “more digestible” for institutional investors, even if they prove less popular among retail investors. She stresses the importance of making it easy for institutions to participate in the market.
Yesterday, 21Shares US LLC , an affiliate of 21Shares AG, announced via a press release the appointment of Federico Brokate as Vice President and Head of U.S. Business. This move is aimed at supporting the company’s expanding presence in the American market.
Federico Brokate brings extensive experience from his previous role at BlackRock, where he served as Director of America’s iShares Business Strategy. During his tenure, he developed and executed strategies for over 30 million clients and managed more than 400 products. He also created go-to-market strategies for new business verticals, including BlackRock’s consumer-focused business and the iShares Bitcoin ETF.
Brokate’s appointment comes at a time of continued growth for 21Shares in the U.S., which now manages over $3.2 billion in assets and employs nearly 50 full-time staff. The company has a lineup of six crypto-asset ETFs and aims to further expand its offerings in the market.
Snyde noted that Brokate’s background in ETF strategy, distribution, and product development would be crucial for the firm’s strategic goals and success in the U.S. market.
Brokate expressed his enthusiasm for joining 21Shares, acknowledging the firm’s commitment to innovation and making crypto investments accessible. He is optimistic about the company’s potential to bridge traditional and decentralized finance.
21Shares has been active in the U.S. market since 2021 and formally entered the market in November 2023 with the launch of five futures-based ETFs. In January 2024, 21Shares introduced a spot Bitcoin ETF, further diversifying its product lineup. The firm plans to continue expanding its portfolio of physically-backed crypto asset ETFs.
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