According to a report by The Block, S&P Global Ratings, an international credit rating agency, has analyzed that the approval of a proposed US Ethereum spot ETF that includes staking operations could increase the concentration risk of Ethereum.
In a report released on Tuesday, analysts Andrew O’Neill and Alexandre Birry of S&P stated that they predict the US Securities and Exchange Commission (SEC) will approve an Ethereum spot ETF as early as May this year, which is the first deadline for approving such funds. Several companies, including BlackRock and Fidelity, have applied for Ethereum spot ETFs. Some of these applicants, particularly Ark Invest and Franklin Templeton, are also seeking additional income through staking the underlying assets (Ethereum).
According to data from Dune, Lido, a decentralized liquidity staking protocol, is currently the largest Ethereum staking platform, followed by the cryptocurrency exchange Coinbase. According to S&P analysts, the staking in Ethereum spot ETFs is unlikely to choose decentralized protocols like Lido. Instead, they may choose institutional-grade cryptocurrency custodians. The impact on concentration will depend on whether the issuers diversify their staked ETH among multiple custodians.
Related report: “SEC further delays Invesco’s Ethereum spot ETF application; Analysts: May is the key!”
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