Donald Trump’s recent victory in the United States presidential election could herald a new era for cryptocurrency innovation, particularly for Ether, the world’s second-largest cryptocurrency. Following his win on November 5, the industry is optimistic about a favorable regulatory climate that could greenlight diverse cryptocurrency financial products, including the first staked Ether exchange-traded fund (ETF).
Anticipated Regulatory Shifts Under Trump
The reelection of Trump is viewed as a positive development for the cryptocurrency industry, which expects more supportive crypto regulations over the next four years. Edward Wilson, an analyst at Nansen, suggests that the new administration might be conducive to significant innovations within the crypto space. “As the regulatory environment will likely be pro-crypto, we may even see a staked ETH ETF approved early in this new administration, which will fully leverage the benefits of ETH as an asset,” Wilson told Cointelegraph.
The introduction of more Ether-based ETFs could propel Ether’s price beyond its previous all-time high of $4,800, reached nearly three years ago on November 16, 2021. In comparison, Bitcoin ETF inflows accounted for about 75% of new investment in Bitcoin when its price exceeded $50,000 in February 2024, shortly after spot BTC ETFs were introduced in the US.
While the US may not be immediately prepared for an Ether staking ETF, other markets could pioneer this innovation. Charles d’Haussy, CEO of the dYdX Foundation, shared his insights at EthCC, expressing optimism about Europe leading the way. “The US is probably not ready for that, but the European market or some adjacent market will give us a way into Ethereum staking ETFs,” he remarked.
Despite the optimism, the performance of US spot Ether ETFs has been underwhelming, with over $489 million in cumulative net outflows since their launch, according to data from Farside Investors. The market’s tepid response to these ETFs had been anticipated by some analysts even before their debut. Eric Balchunas, a senior ETF analyst at Bloomberg, had previously commented to Cointelegraph that Ether ETFs might remain a “sidekick” to the more dominant spot Bitcoin ETFs in terms of capital inflows.
As Trump prepares for his second term, the crypto industry watches closely, hopeful for regulatory advancements that might further legitimize and expand the market for Ethereum and other digital assets. The possibility of the first staked Ether ETF could mark a significant milestone, potentially transforming Ether into an even more attractive investment option and catalyzing further growth in the cryptocurrency sector.
More Crypto-Friendly Administration
The return of Donald Trump to the presidency and the Republican majority in Congress may mark a turning point for the cryptocurrency industry. This administration could dismantle some of the restrictive measures seen in previous years, potentially paving the way for innovations such as the staked Ether ETF and broader acceptance of crypto assets in mainstream financial products. This move could significantly influence the global market by setting a precedent for other nations to follow, thus reinforcing the United States’ position as a leader in financial innovation. The crypto community remains cautiously optimistic, awaiting concrete actions that align with the promises made during the campaign trail.
