Grayscale has crossed a regulatory and structural line that could reshape how U.S. investors access Ethereum yield.
Summary
- Grayscale’s ETHE becomes the first U.S.-listed crypto ETP to distribute Ethereum staking rewards.
- The payout converts on-chain staking yield into cash without reducing ETH holdings.
- The move could accelerate adoption of yield-bearing Ethereum ETFs in U.S. markets.
Grayscale has made history by becoming the first U.S.-listed crypto issuer to pass Ethereum staking rewards directly to exchange-traded fund investors.
The milestone was confirmed in a Jan. 5 announcement by Grayscale, which said its Grayscale Ethereum Staking ETF (ETHE) completed its first-ever distribution tied to on-chain staking activity.
First staking payout from a U.S. spot Ethereum ETP
According to the firm, ETHE distributed $0.083178 per share to eligible shareholders, representing proceeds from Ethereum (ETH) staking rewards earned between Oct. 6 and Dec. 31, 2025. The payout, made on Jan. 6, followed a record date of Jan. 5 and totaled roughly $9.4 million across the fund.
Rather than distributing ETH directly, Grayscale sold the accumulated staking rewards and paid investors in cash, leaving the fund’s underlying Ether holdings unchanged. ETHE began trading ex-dividend on Jan. 5.
The distribution marks the first time a U.S.-listed spot crypto ETP has successfully passed staking income through to investors, bridging traditional exchange-traded products with Ethereum’s proof-of-stake yield model.
Grayscale activated staking for its Ethereum products in October 2025, making ETHE and its companion product, the Ethereum Staking Mini ETF (ticker: ETH), the first U.S. ETPs to enable staking. Both funds were formally renamed in early January to reflect the added functionality.
Why the milestone matters for Ethereum ETFs
The move is being closely watched across both crypto and traditional finance. Staking rewards introduce a yield component that had previously been unavailable to U.S. spot Ethereum ETFs, potentially changing how institutional investors assess ETH exposure.
Because ETHE is not registered under the Investment Company Act of 1940, it offers more flexibility than traditional ETFs, but it also comes with more risks. Lock-up times, validator performance, network outages, and smart contract vulnerabilities can all affect returns on staked ETH.
Still, analysts view the payout as a significant step toward integrating blockchain-native economics into regulated investment vehicles. Other issuers, including BlackRock and Fidelity, have filed proposals or amendments related to Ethereum staking, though none have yet distributed rewards.
Grayscale is pushing ahead with plans to expand staking across its product lineup. At the same time, the company says investor education and transparency will remain central to the strategy. Any payouts, it explained, will be tied to staking performance and market conditions, with no fixed timeline yet for future distributions
This move highlights Ethereum’s growing role as a yield-generating asset for institutional investors and reflects how crypto ETFs are quickly evolving beyond simply tracking prices.
