Swiss company 21Shares has submitted a formal request to the U.S. Securities and Exchange Commission (SEC) to register an ETF that tracks the performance of a cryptocurrency with the potential to reflect staking rewards for investors.
This request is part of an S-1 registration filing, and the fund aims to track the CF SEI-Dollar index. The creation and redemption of fund units are to be done in cash or kind, with Coinbase Custody appointed as the asset custodian.
A notable feature of this request is that the fund may reflect staking rewards for investors, but this is entirely contingent upon obtaining the necessary regulatory and tax approvals from the Securities and Exchange Commission. Previous delays by the commission regarding similar funds, such as those by Grayscale for Ethereum, indicate that the likelihood of approval for the staking feature at the initial listing is low and subject to strict scrutiny.
Market reaction and technical performance:
The SEI cryptocurrency reacted positively to the news, as its price jumped by 3.33% upon the announcement to trade around $0.30. Its current market capitalization is $1.82 billion.
Technically, analyses indicate that SEI bounced off a critical support level at $0.29, reinforcing the short-term bullish outlook. Analysts set acceptable targets at $0.345, with potential for a rebound towards $0.60 if positive momentum continues and resistance is broken.
Summary:
The 21Shares application represents an important step towards increasing institutional investment options in the cryptocurrency world. However, the path to approval, especially for the staking feature, appears long and uncertain in the current regulatory environment. Investors should focus on risk management and monitor the commission's developments rather than merely speculate on the likelihood of approval.
