As the ETH price recently soared above USD 3,000, analysts at ratings agency S&P Global are voicing concerns about an Ether ETF. If the new spot ETFs include a staking option, they could "new concentration risks" with it, they say.

In a report, they warn that the entry of financial giants such as BlackRock or Fidelity into the market through Ether ETFs could significantly alter the balance of power of validators in Ethereum. Some ETF filers, including Franklin Templeton, want to enable stakers in the new funds. According to S&P Managing Director Andrew O'Neill, this could have a major impact on validators participating in the Ethereum network's consensus mechanism.

Currently, Lido still accounts for about a third of ETH in use as a decentralized staking protocol, making it the largest Ethereum validator. However, the report doubts that ETF issuers will choose decentralized staking protocols.

Instead, a trend toward institutional crypto custodians seems more likely to them. Especially highlighted is the concentration risk of Coinbase, mentioned as a potential custodian for some ETF applications.

The crypto exchange Coinbase currently accounts for about 15 percent of ETH stakes, making it the second largest validator after Lido. It also serves as custodian for three of the four largest Ether ETFs outside the US.

These issues are relevant because relying on one institution could increase the risk of attacks and errors in validation. The emergence of new custodians for digital assets would offer ETF issuers a way to diversify their holdings more broadly. The SEC must make a decision on VanEck's application by May 23.