The New York Stock Exchange (NYSE) is shaking things up in the crypto investment space. It has applied with the U.S. Securities and Exchange Commission (SEC) to allow Grayscale’s spot Ethereum ETFs to stake their holdings and earn staking rewards. If approved, this could be a game-changer for Ethereum-based ETFs.
Grayscale’s Ethereum Trust ETF (ETHE) and Ethereum Mini Trust ETF (ETH) would be able to stake their Ether, potentially boosting returns for investors while improving overall fund efficiency. The filing, submitted on Feb. 14, highlights that this move aligns with making Ethereum ETFs more competitive and rewarding.
Grayscale made it clear, that staking might bring in extra income, but they’re not promising any fixed returns. The company emphasized that staking rewards will be considered fund income but reassured investors that this approach doesn’t involve “delegated staking” or “staking as a service.”
“By allowing the Trusts to stake their Ether, investors could enjoy additional rewards while still staying exposed to Ethereum’s price movements,” Grayscale explained.
This push follows in the footsteps of 21Shares, another asset manager that recently applied to enable staking in its spot Ethereum ETF. Initially, the SEC shut down staking for Ethereum ETFs when they were first approved in July 2024 due to regulatory concerns. But with a potentially more crypto-friendly SEC under the new administration, those restrictions might be up for discussion again.
If the SEC gives this the green light, Grayscale’s ETFs could generate passive income through staking while still tracking Ethereum’s price. That means investors might see additional returns just by holding their shares.
NYSE Arca, a subsidiary of NYSE, has emphasized that their staking model is different, it’s done only with Ethereum already held in the trust, cutting out extra risks linked to traditional staking services.
With the SEC under growing pressure to clarify crypto regulations, this decision could set the stage for Ethereum ETFs, and maybe even other crypto-based investment products, to evolve. Investors and industry watchers are now waiting to see if this could mark a major shift in how Ethereum ETFs operate in the market.
Also Read: SEC Acknowledges Grayscale’s XRP & Dogecoin ETF Filings
