The recent approval of Ethereum (ETH) exchange-traded funds (ETFs) by regulatory bodies marks a significant milestone in cryptocurrency history.
Amidst this development, veteran trader Peter Brandt has raised alarms, warning of potential disasters in the crypto staking sector following the U.S. Securities and Exchange Commission (SEC) green light for spot Ethereum ETFs.
Peter Brandt, a well-known figure in the trading community, took to social media platform X (formerly Twitter) on May 24 to express his grim outlook.
“The biggest disasters yet to come in crypto will be related to staking,” Brandt predicted, emphasizing the potential for significant financial losses and bankruptcies.
An opinion that will not have much appeal among ETH/SOL similar hound dogs.
The biggest disasters yet to come in crypto will be to staking (and those who think they are doing the staking). The bankruptcies and personal fortunes lost in the staking game will someday blow your mind pic.twitter.com/pmnm4fo6Oi
— Peter Brandt (@PeterLBrandt) May 24, 2024
Potential regulatory impact
Brandt’s recent warnings are part of a broader critique he has been voicing. Earlier this month, he predicted a full-scale SEC assault on crypto staking, describing it as a “bloodbath” and deeming the practice “illegal as hell.”
Brandt’s comments came in the wake of the SEC’s unexpected approval of eight spot Ethereum ETFs, a decision that caught many in the crypto industry off guard.
Previously, the SEC had not engaged with issuers, but it suddenly began interacting with them and requested resubmissions of filings on an accelerated basis.
Despite the approval of spot Ethereum ETFs, the SEC has not clarified whether Ethereum is classified as a security or a commodity. Notably, all issuers of these ETFs did not include staking in their applications, which highlights a critical distinction.
Concerns and reactions from the crypto community
Brandt elaborated on his concerns in follow-up posts, outlining the potential negative impacts of staking on the market.