Title: Wall Street's Staking Rush
Author: Thejaswini MA
Compiled by: Block unicorn
Preface
In 1688, captains would gather at Edward Lloyd's coffee house in London, seeking individuals willing to insure their voyages. Wealthy merchants would sign under ship details, becoming "underwriters", guaranteeing these high-risk voyages with their personal wealth. The better the underwriter's reputation, the safer it was for everyone. The more secure the system, the more business it attracted. It was simple: provide funds, reduce everyone's risk, and then collect a profit share.
Reading the new guidelines from the U.S. Securities and Exchange Commission (SEC), it's clear that cryptocurrencies are merely digitalizing the mechanism invented by coffee house underwriters - people earn returns by putting assets at risk, thereby making the entire system safer and more trustworthy.
Staking. Yes, it's back on the agenda. On May 29, 2025, everything changed. That day, the U.S. government clearly stated that staking won't get you into legal trouble. First, let's review why this is so important now. In staking, you can lock your tokens to help secure the network and earn steady rewards.
Validators use their staked tokens to validate transactions, propose new blocks, and maintain the blockchain's smooth operation. In return, the network pays them with newly minted tokens and transaction fees. Without stakers, proof-of-stake networks like Ethereum would collapse.
Of course, you can stake your tokens, but no one knew if the SEC would one day come knocking, claiming you're conducting an unregistered securities offering. This regulatory uncertainty kept many institutions on the sidelines, watching retail stakers earn 3-8% annual yields with envy.
The Great Staking Rush
On July 3rd, Rex-Osprey Solana + Staking ETF went live, becoming the first U.S. fund offering direct cryptocurrency investment with staking rewards. It holds SOL through a Cayman Islands subsidiary and uses at least half of its holdings for staking. "First staking crypto ETF in the U.S.," Rex Shares announced. And they're not alone.
Robinhood just launched cryptocurrency staking services for U.S. customers, initially supporting Ethereum and Solana. Kraken added Bitcoin staking through the Babylon protocol, allowing users to earn BTC yields while maintaining the native chain. VeChain launched a $15 million StarGate staking program. Even Bit Digital abandoned its entire Bitcoin mining business, focusing on Ethereum staking.
What's changed now?
Two Regulatory Domino Tiles
First, the SEC's staking guidance released in May 2025. It stated that if you stake your cryptocurrency to help run a blockchain, it's completely fine and not viewed as a high-risk investment or security. This covers individual staking, delegating your tokens to others, or staking through trusted exchanges, as long as your staking directly helps the network. This will remove most staking activities from the "investment contract" definition under the Howey Test. This means you no longer need to worry about accidentally violating complex investment laws just by staking and earning rewards.
The only red flag is someone promising guaranteed profits, especially when mixing staking with lending, or issuing fancy DeFi bundled products, guaranteeing returns or yield farming.
Second is the CLARITY Act. A law proposed in Congress aimed at clarifying which government agency is responsible for different digital assets. Specifically designed to protect those merely running nodes, staking, or using self-custodial wallets from being treated like Wall Street brokers.
It introduces the concept of "investment contract assets", a new digital commodity category, and establishes standards to determine when digital assets are securities (SEC-regulated) or commodities (CFTC-regulated). The act sets procedures for determining when blockchain projects or tokens have "matured" and can move from SEC to CFTC regulation, and sets time limits for SEC reviews to prevent indefinite delays.
So, what does this mean for you?
Due to the SEC's guidance, you can now stake your cryptocurrencies more confidently in the U.S. If the CLARITY Act passes, everyone wanting to stake or participate in cryptocurrencies will get a more convenient and safer experience. Staking rewards are still taxed as ordinary income when you gain "dominion and control", and you'll owe capital gains tax if you sell the rewards later. All staking income, regardless of amount, must be reported to the IRS.
Who's in Focus? Ethereum.
No, it's still around $2,500.
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Lackluster price performance, but Ethereum's staking metrics show changes. The amount of staked ETH just hit a historic high, exceeding 35 million, almost 30% of total circulating supply. Though these infrastructure developments have continued for months, they suddenly became especially significant.
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What's happening in corporate boardrooms?
BitMine Immersion Technologies just raised $250 million to purchase and stake Ethereum (ETH), with the company chaired by Tom Lee from Fundstrat. Their strategy bets that staking rewards plus potential price appreciation will outperform traditional government bond assets. SharpLink Gaming further deepened this strategy, expanding its ETH reserves to 198,167 tokens and staking its entire holdings. In just one week in June, they earned 102 ETH in staking rewards. Just by locking tokens, they get "free money".
Meanwhile, Ethereum ETF issuers are queuing for staking approval. Bloomberg analysts predict a 95% probability of staking ETF regulatory approval in the coming months. BlackRock's digital assets head called staking "a huge advancement" for Ethereum ETFs, and he might be right.
If approved, these staking ETFs could reverse the capital outflow that has plagued Ethereum funds since launch. Why settle for price exposure when you can get both price exposure and yield?
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Crypto Speaks Wall Street's Language
For years, traditional finance struggled to understand crypto's value proposition. Digital gold? Maybe. Programmable money? Sounds complicated. Decentralized applications? What's wrong with centralized apps? But yield? Wall Street understands yield. Admittedly, bond yields have rebounded from near-zero lows in 2020, with one-year U.S. Treasury yields rising to around 4%. But a regulated crypto fund generating 3-5% annual staking rewards while offering potential underlying asset appreciation is truly enticing.
Legitimacy is crucial. When pension funds can buy Ethereum exposure through regulated ETFs and earn rewards by protecting the network, it's a big deal. Network effects are emerging. As more institutions participate in staking, networks become more secure. As networks become more secure, they attract more users and developers. As adoption increases, transaction fees rise, enhancing staking rewards. It's a virtuous cycle benefiting all participants.
You don't need to understand blockchain technology or believe in decentralization to appreciate an asset that rewards you for holding it. You don't need to believe in Austrian economics or distrust central banks to appreciate an asset as productive capital. You just need to understand that networks require security, and participants providing security deserve to be rewarded.
