Grayscale Makes First Ethereum Staking Payout to US ETF Investors

TLDR

• Grayscale paid its first Ethereum staking rewards to ETF shareholders on January 6, 2025, distributing $0.08 per share
• The Grayscale Ethereum Trust ETF (ETHE) became the first US-listed crypto ETF to pay out staking rewards after enabling staking in October 2024
• US spot Ethereum ETFs attracted $9.6 billion in inflows during 2024, their first full year of trading
• BlackRock’s iShares Ethereum Trust ETF leads the market with $11.1 billion in assets under management
• Several other Ethereum ETFs from Fidelity and 21Shares are awaiting SEC approval to add staking features

Grayscale paid the first staking rewards distribution for a US-listed crypto exchange-traded fund on January 6, 2025. Shareholders of the Grayscale Ethereum Trust ETF received $0.08 per share based on holdings recorded at market close on January 5.

The payment came from staking rewards earned between early October and the end of December 2024. Grayscale activated staking for its Ethereum products on October 6, 2024, making ETHE and the Grayscale Ethereum Mini Trust ETF the first US spot crypto products to gain exposure to Ether staking.

Staking involves locking cryptocurrency on a proof-of-stake blockchain to validate transactions and secure the network. Participants receive periodic rewards for this activity. Grayscale converts these rewards to cash and distributes them to investors in dollars rather than Ether.

The fund operates outside the Investment Company Act of 1940, which is the main statute governing US ETFs. This structure allows staking but provides different regulatory protections than traditional US ETFs.

Grayscale conducts staking through institutional custodians and third-party validator providers. The company manages about $31 billion in assets across its digital asset investment products.

Growing Interest in Ethereum Staking ETFs

Other major asset managers are seeking regulatory approval to add staking to their Ethereum ETFs. Cboe BZX filed a proposed rule change in March 2024 to add staking to the Fidelity Ethereum Fund. The proposal would let the fund stake some or all of its Ether through third-party providers.

A similar filing was submitted in February for the 21Shares Core Ethereum ETF. BlackRock registered a staked Ethereum ETF in Delaware in November 2024, an early step toward launching a staking-enabled product.

BlackRock’s iShares Ethereum Trust ETF launched in July 2024 without staking features. The company has not announced when or if staking will be added to the existing fund.

US spot Ether ETFs began trading in July 2024. During 2024, the funds attracted $9.6 billion in inflows and now collectively manage about $18 billion in assets according to CoinMarketCap data.

BlackRock’s iShares Ethereum Trust ETF leads the market with $11.1 billion in assets under management. Grayscale’s ETHE holds about $4.1 billion and the Grayscale Ethereum Mini Trust ETF manages around $1.5 billion.

The Grayscale ETF was up around 2 percent in early trading on the day of the payout announcement. Recent data from SoSoValue showed net inflows turning positive after a period of outflows.

Bloomberg Intelligence analyst James Seyffart reported that US Ethereum funds experienced about $2.8 billion in withdrawals since reaching peak inflows of approximately $15 billion. These withdrawals represent about 18 percent of cumulative flows.

US spot Ether ETFs collectively manage about $19 billion in assets based on current Ethereum prices. This total is down from more than $32 billion at the beginning of October 2024.

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