3iQ Digital Asset Management (3iQ), a pioneer in digital asset investment solutions and one of Canada’s largest investment fund managers dedicated to digital assets, has announced that The Ether Fund (QETH.UN, QETH.U) and The 3iQ Ether ETF (ETHQ, ETHQ.U) will begin staking ether (ETH) held in their portfolios starting August 28, 2023. This move marks the launch of the first exchange-traded products in North America and the first ETF globally to implement staking as part of its investment strategy.
Staking activities allow the Funds to earn rewards in the form of ETH, which will enhance the net asset value (NAV) of the Funds and increase their exposure to ETH. This provides an opportunity for yield enhancement and eliminates the complexities of directly handling digital assets for investors.
To support the staking of ETH in these products, 3iQ has partnered with Coinbase Custody Trust Company, LLC as the custodian. 3iQ will exclusively use Coinbase Custody’s institutional staking infrastructure.
Fred Pye, Chairman and CEO of 3iQ, stated, “3iQ has an established history of delivering digital asset investing firsts in North America, Canada, and across the globe, and we remain committed to staying at the forefront of innovation and providing compelling digital asset investment solutions for our clients.”
The ability to stake ETH in the Funds is a result of recent updates to the Ethereum network. The network transitioned from a proof-of-work protocol to a proof-of-stake protocol through the Shanghai/Capella upgrade, completed on April 12, 2023.
While there are risks associated with staking activities, including third-party risk and regulatory risk, 3iQ ensures that all staking activity complies with applicable laws and works with regulators in Canada and abroad to design and implement innovative investment strategies.
In addition to The Ether Fund and The 3iQ Ether ETF, 3iQ offers other investment products that provide exposure to digital assets, such as The Bitcoin Fund (QBTC, QBTC.U) and the recently launched 3iQ Bitcoin ETF (BTCQ, BTCQ.U).
Overall, this announcement showcases 3iQ’s commitment to innovation and providing institutional investors with convenient and secure access to digital assets.