Grayscale makes history! Ethereum staking ETF dividends are $0.08 per share

Grayscale announces staking reward distribution for ETHE and ETH, becoming the first U.S. spot crypto ETF to distribute on-chain staking yields. Shareholders receive approximately $0.08 per share, distributed on Tuesday. Grayscale enabled Ethereum staking in October, with ETHE’s market cap around $4.1 billion and the ETH Mini Trust approximately $1.5 billion.

Milestone Significance of the First U.S. Staking Yield Distribution

(Source: Grayscale)

According to a press release issued Monday, shareholders of the Grayscale Ethereum Trust ETF (ETHE) will receive about $0.08 per share from the proceeds of staking reward sales, with payments scheduled for Tuesday based on holdings recorded at Monday’s close. This marks the first time a U.S.-listed spot crypto exchange-traded product (ETP) has linked payments to on-chain staking activity, setting a regulatory precedent.

Staking involves locking cryptocurrencies on a proof-of-stake (PoS) blockchain to help validate transactions and secure the network, earning periodic rewards. For Grayscale’s Ethereum Trust ETF, these rewards are converted into cash and distributed in USD to investors, rather than paid in Ether. This design avoids the complexity of direct crypto asset holdings and aligns more with traditional financial investors’ habits.

While a $0.08 dividend per share may seem modest, for institutional investors holding large quantities, it represents a significant additional income. For example, holding 10,000 ETHE shares would yield an immediate $800 in a single distribution. More importantly, this reward is an extra return beyond the ETF’s price fluctuations, similar to stock dividends. If Ethereum’s staking annual yield remains at 3-4%, long-term holders’ total returns could be substantially enhanced.

On October 6, Grayscale activated staking for its Ethereum products, with staking managed through institutional custodians and third-party validators. This move makes ETHE and the Grayscale Ethereum Mini Trust ETF (ETH) among the first to list in the U.S. and support Ether staking. This pioneering advantage helps Grayscale establish a differentiated selling point in the competitive ETF market.

Grayscale’s Regulatory Arbitrage and Competitive Edge

Grayscale’s funds are not subject to the Investment Company Act of 1940, which is the main regulation for U.S. ETFs. This structure allows staking but offers different regulatory protections compared to traditional U.S. ETFs. This is a key reason why Grayscale could be the first to launch staking reward distribution, as traditional ETFs constrained by the Investment Company Act face stricter regulatory scrutiny when introducing staking features.

Grayscale uses a trust structure rather than a traditional ETF structure, which initially helped it bypass complex ETF approval processes and quickly launch products. Although this structure typically incurs higher fees than conventional ETFs, it provides greater flexibility for staking functionalities. Investors need to weigh the higher management fees against staking yield benefits.

According to Yahoo Finance, the ETF rose about 2% in early trading. This market reaction indicates positive sentiment toward the staking reward distribution news. Founded in 2013, Grayscale is a digital asset management firm primarily offering crypto investment products. The company reports managing approximately $31 billion in assets.

Based on CoinMarketCap data, the total assets under management for U.S. spot Ether ETFs are about $18 billion. BlackRock’s iShares Ethereum Trust ETF (ETHA) has the largest market cap at around $11.1 billion, followed by Grayscale’s ETHE at about $4.1 billion, and the Grayscale Ethereum Mini Trust ETF at approximately $1.5 billion.

U.S. Ethereum ETF Market Landscape

BlackRock ETHA: Market cap $11.1 billion, no staking functionality yet, but registered for a stakable version

Grayscale ETHE: Market cap $4.1 billion, staking enabled with first dividend paid

Grayscale ETH Mini Trust: Market cap $1.5 billion, supports staking concurrently

Fidelity and 21Shares: Have submitted staking applications awaiting SEC approval

Staking Race Set to Fully Unfold

(Source: CMC)

Although Grayscale is currently the only listed fund in the U.S. linked to Ethereum staking, several major asset managers’ spot Ethereum ETFs are awaiting SEC regulatory approval. In March, Cboe BZX submitted a proposed rule change seeking approval to add staking functionality to Fidelity’s Ethereum Fund. The proposal would allow the fund to stake some or all of its Ether through third-party providers.

In November last year, BlackRock registered a stakable Ethereum ETF in Delaware, a key step toward launching a product supporting staking, which will run alongside its existing spot Ethereum ETF. Its iShares Ethereum Trust ETF (ETHA) launched in July 2024 but currently does not include staking. The 21Shares Core Ethereum ETF also filed a similar application in February.

This competitive landscape indicates that staking reward distribution for Ethereum will become a standard feature of ETF products. Once giants like BlackRock and Fidelity get their staking applications approved, Grayscale’s first-mover advantage might be diluted. However, as the first ETF to actually distribute staking rewards, Grayscale has already established a “staking pioneer” brand image in investors’ minds.

U.S. spot Ethereum ETFs began trading in July 2024, with 2025 being their first full year open to investors. That year, these funds attracted $9.6 billion in inflows. As staking features become more widespread, this figure could further grow in 2026, as investors gain an additional income source from holding ETFs.