Grayscale Launches First US Ethereum Staking ETFs

Grayscale Investments announced an industry-first milestone on Monday by enabling staking for two of its Ethereum ETFs, making the Grayscale Ethereum Trust ETF (ETHE) and Grayscale Ethereum Mini Trust ETF (ETH) the first US-listed spot crypto exchange-traded products to offer this feature. The company simultaneously activated staking for its Grayscale Solana Trust (GSOL), which currently trades over-the-counter while awaiting regulatory approval. This strategic move positions Grayscale as a pioneer in the evolving digital assets landscape, offering investors additional yield opportunities beyond simple price appreciation.

Peter Mintzberg, CEO of Grayscale, emphasized the company’s commitment to innovation, stating: “Staking in our spot Ethereum and Solana funds is exactly the kind of first mover innovation Grayscale was built to deliver.” The staking will be conducted passively through institutional custodians and validator providers, ensuring security for the underlying blockchain protocols while providing investors with a hands-off approach to earning staking rewards.

The two Ether funds offer fundamentally different investment approaches to staking returns, allowing investors to choose based on their financial objectives. The Grayscale Ethereum Trust ETF (ETHE) will pay distributions to investors seeking immediate cash flow, making it suitable for those who prefer regular income from their digital asset holdings. In contrast, the Grayscale Ethereum Mini Trust ETF (ETH) will roll staking returns directly into the fund’s net asset value (NAV), enabling compounding growth over time for long-term investors.

This dual-approach strategy addresses varying investor preferences within the crypto ETP space. As Grayscale stated in their announcement: “At Grayscale, you can now choose how you want to experience Ethereum staking. $ETHE will pay distributions for those who like cash flow, while $ETH will roll staking returns into NAV so they can compound over time. Different goals, same platform.” The company has also published educational materials to help investors understand how staking works and the implications of each approach.

The Grayscale ETHE fund has faced significant challenges since its launch, with approximately $4.5 billion exiting the product primarily due to its higher fees compared to competitors like BlackRock’s ETHA and Fidelity’s FETH. However, the newly launched mini-trust (ETH) has attracted substantial investor interest, recording $1.5 billion in inflows. This divergence in performance suggests that investors are responding positively to the new staking feature and potentially more competitive fee structure of the mini-trust.

The timing of Grayscale’s staking announcement coincides with Ethereum’s strong price performance, with ETH reaching a three-week high of $4,734 on Monday before cooling to $4,680 during Tuesday morning Asian trading. This places Ethereum just 5.4% away from its all-time high recorded in August. Analyst ‘Merlijn the Trader’ commented on Ethereum’s market position, stating: “Ethereum’s liquidity reset is complete,” and described the recent dip below $4,000 as the “reload zone,” adding that “now the chart screams expansion” with predictions of ETH reaching $10,000 to $14,000 this cycle.

With 35.7 million ETH worth $167 billion currently staked—representing approximately 30% of Ethereum’s total supply—the staking ecosystem remains robust despite a significant exit queue of around 2.5 million ETH waiting to be unstaked. Industry observers anticipate that major ETF issuers like BlackRock and Fidelity will likely follow Grayscale’s lead and introduce staking features in their own crypto funds soon, potentially creating a new competitive dynamic in the crypto ETP space.