Bernstein Analysts Predict Ethereum Staking Yield Approval Under Trump Administration
With Donald Trump‘s inauguration in 2025, analysts at Bernstein believe staking yields might gain approval for spot Ethereum Exchange-traded Funds (ETFs) in the United States. The incoming Trump administration is one of four factors driving renewed interest in Ethereum #ETH.
The broader crypto market has a combined capitalization of approximately $3.37 trillion. This metric has decreased by 1.54% in the last 24 hours but has increased by 45% since Trump's election victory.
The price of Bitcoin #BTC surged following the election update, with Ethereum also experiencing modest gains.
Ethereum Outshines Bitcoin and Solana
Over the past month, Ethereum's price increased more than that of Bitcoin and Solana. While BTC and SOL #SOL rose by 41% and 36%, respectively, Ethereum recorded a growth of 46%.
Ripple-associated XRP #XRP outperformed Solana’s market cap, gaining up to 358% during the same period. However, ETH still lags in year-to-date value.
Bernstein analysts, led by Gautam Chhugani, proposed that Ethereum struggles to establish itself as a store of value like Bitcoin and faces competition from other Layer-1 blockchains. Additionally, Ethereum's reliance on Layer 2 solutions for scaling complicates the user experience, pushing retail users toward faster alternatives or specific Layer-2 protocols like Base. These factors limit Ethereum's fee growth and user retention.
Despite its challenges, analysts highlighted Ethereum's risk-reward profile as increasingly attractive, which could drive traction to the coin.
According to Bernstein, four critical catalysts could propel ETH's growth in this cycle. One potential factor is the reintroduction of staking yield for US spot Ethereum ETF approvals. With a pro-crypto president, this feature may be added to the spot ETH ETF offering.
“We believe, under a new Trump 2.0 crypto-friendly SEC, ETH staking yield will likely be approved,” the analysts stated.
Hong Kong Set Out to Approve Staking for Ethereum ETFs
Hong Kong regulators are considering approving staking features for spot Ethereum ETFs. This step aims to provide a global competitive edge in crypto, particularly against the US. Consequently, US regulators may need to implement the staking feature swiftly to maintain market dominance.
The analysts noted that Ethereum's current yield of 3% could rise to 5% due to increased blockchain activities, offering compelling returns for investors and enhancing ETF economics for asset managers.
Meanwhile, Ethereum ETF inflows continue to strengthen, indicating renewed interest in the offering.