Grayscale Adds Staking to Ethereum ETFs, Solana Trust

Grayscale has made a landmark move in the cryptocurrency exchange-traded product space by adding staking functionality to its two spot Ethereum ETFs in the United States. The firm, which filed its staking addendum with the SEC on Monday, will enable investors in its Ethereum Trust ETF (ETHE) and Ethereum Mini Trust ETF (ETH) to earn ETH staking rewards for the first time. This development represents a crucial bridge between traditional financial products and crypto-native features that have previously been inaccessible to mainstream investors.

The $4.82 billion Ethereum Trust ETF (ETHE) stands as the second-largest Ethereum fund on Wall Street, giving the staking addition significant market impact. Grayscale will rely on institutional custodians like Coinbase and what it describes as a “diversified network of validator providers” to stake its Ethereum holdings. This institutional-grade approach addresses regulatory concerns while providing investors with exposure to Ethereum’s proof-of-stake rewards mechanism, which the network transitioned to in 2022.

The absence of staking rewards in Ethereum ETFs has been cited as a key factor in their slower adoption compared to Bitcoin products since both launched in the summer of 2024. Current data reveals a stark contrast: Bitcoin ETFs hold $164.5 billion in total net assets, equivalent to 6.7% of Bitcoin’s market capitalization, while Ethereum ETFs lag with $30.5 billion in net assets, representing 5.6% of ETH’s valuation.

However, recent trends suggest growing momentum for Ethereum products. Crypto exchange-traded products just capped off a record week with $5.95 billion in total investments, including $1.48 billion flowing specifically into Ethereum funds. This resurgence follows a previous week of outflows and aligns with ETH’s remarkable market performance—the cryptocurrency has surged 156% over the past six months, significantly outpacing Bitcoin’s 50% gains and reaching a new all-time high near $5,000 in September.

Grayscale’s staking initiative extends beyond Ethereum to include its Solana Trust, though this product awaits regulatory approval for ETF conversion. The company has positioned this move as part of its broader strategy to roll out staking to more products “as the digital asset ecosystem evolves.” In a statement, Grayscale CEO Peter Mintzberg characterized staking as “exactly the kind of first-mover innovation” that the company was designed to deliver.

Mintzberg emphasized Grayscale’s unique position, stating: “As the #1 digital asset-focused ETF issuer in the world by AUM, we believe our trusted and scaled platform uniquely positions us to turn new opportunities like staking into tangible value potential for investors.” This innovation could help Grayscale close the competitive gap with BlackRock, whose Bitcoin and Ethereum ETFs currently dominate the market. The staking feature provides a distinct value proposition that differentiates Grayscale’s products in an increasingly crowded ETF landscape.