Staking Rewards in Cryptocurrency ETFs: Grayscale Paves the Way as Market Advances

Grayscale Investments has taken an unprecedented step by distributing the first staking yields of Ethereum to shareholders of an American exchange-traded fund. Investors in the Grayscale Ethereum Trust ETF (ETHE) will receive approximately US$ 0.08 per share, with the credit scheduled for Tuesday. This payment results from accumulated staking rewards since the company activated this feature in October.

How Staking Works in ETFs

Staking involves locking digital assets in proof-of-stake networks, allowing validators to maintain network security and receive compensation in return. In the approach adopted by Grayscale, these rewards are converted into US dollars and distributed in fiat currency to shareholders, rather than being kept in Ether.

Regulatory Framework: How Grayscale Differs

The model adopted by Grayscale differs significantly from conventional ETFs because its Ethereum funds operate outside the regulatory framework of the Investment Company Act of 1940, which governs most exchange-traded products in the US. This structural distinction is precisely what allows the company to actively participate in staking activities — a capability that traditional ETFs do not yet possess. In return, investors do not enjoy the same regulatory protections offered to conventional products.

ETHE and the Grayscale Ethereum Mini Trust (ETH) thus became the first spot crypto funds traded in the US to offer exposure to Ethereum staking rewards. Since its founding in 2013, Grayscale has grown significantly, managing approximately US$ 31 billion in assets. ETHE saw its shares rise about 2% in early trading.

Competitors Seek Approval for Staking

Grayscale’s leadership will not remain isolated for long. Major asset managers are already moving toward including staking in their own Ethereum ETFs. BlackRock registered an Ethereum ETF with staking features in Delaware as a procedural first step, complementing its iShares Ethereum Trust (ETHA), launched in July 2024 without this functionality. Fidelity submitted a proposal to the Cboe BZX Exchange in March to add staking to its Ethereum Fund, while 21Shares had made a similar move in February.

Ethereum ETF Sector Overview

Ethereum spot ETFs in the US began operations in July 2024, and 2025 marks the first full calendar year of these products’ operation. During 2024, these funds attracted approximately US$ 9.6 billion in net inflows.

Currently, the market is divided among several players:

• BlackRock iShares Ethereum Trust (ETHA): dominant with about US$ 11.1 billion in assets
• Grayscale Ethereum Trust (ETHE): US$ 4.1 billion
• Grayscale Ethereum Mini Trust: US$ 1.5 billion

In total, US spot Ethereum ETFs collectively manage approximately US$ 18 billion in assets, reflecting the growing adoption of cryptocurrency products by institutional and retail investors.