Grayscale to Distribute Ethereum Staking Rewards to ETF Shareholders

Grayscale announced on January 5, 2026, that its Ethereum Staking ETF (ETHE) will distribute staking rewards to shareholders for the first time. The distribution is the first instance of a U.S. spot crypto ETP passing on-chain staking income to investors. Shareholders of ETHE will receive $0.083178 per share held, based on ownership as of January 5, 2026, with the payout scheduled for January 6. The reward reflects staking proceeds from October 6 to December 31, 2025.

The move marks a milestone in how U.S. investors access Ethereum yield, as it introduces a new revenue stream for Ethereum-based ETPs. Prior to this, U.S. spot crypto ETPs tracked price movements without integrating staking activity. Grayscale became the first U.S. issuer to activate staking for Ethereum products in October 2025.

The distribution of staking rewards in cash form, rather than in Ether, aligns with Grayscale's strategy of delivering returns to investors in a regulated manner. The firm's Ethereum Staking ETF is not registered under the Investment Company Act of 1940, which allows greater flexibility but also exposes investors to different risk profiles.

Why Did This Happen?

Grayscale's decision to distribute staking rewards stems from the regulatory clarity provided in late 2025 regarding the treatment of staking under U.S. securities law. The U.S. Treasury and IRS guidance helped create a framework for crypto ETPs to engage in staking while complying with the Securities Act of 1933. This clarity allowed Grayscale to move forward with distributing staking rewards to shareholders while ensuring compliance with the law.

Activating staking for Ethereum products was another foundational step. Grayscale enabled staking through institutional custodians and third-party validator providers, ensuring that the process met high security standards. This approach enabled ETHE to generate network rewards, which were later distributed in cash form.

How Did Markets Respond?

Following the announcement, ETHE traded ex-dividend on January 5, 2026. Investors who purchased shares on that day or afterward did not receive the distribution. The fund's shares rose approximately 2% in early trading according to Yahoo Finance data.

Grayscale's move has set a regulatory precedent for how staking income can be integrated into ETP structures. Other major firms, including BlackRock and Fidelity, have filed proposals to add staking to their Ethereum ETFs, but no distributions have yet occurred.

What Are Analysts Watching Next?

Analysts are closely monitoring how this distribution will shape the future of staking-enabled ETPs. The move introduces a yield component previously absent from U.S. spot Ethereum ETFs, which could influence how institutional investors evaluate Ethereum exposure.

Regulatory scrutiny of staking rewards in ETPs remains a focus. While Grayscale's approach complies with the Securities Act of 1933, the company must navigate different obligations compared to registered investment companies.

The response from other issuers is also under observation. BlackRock and Fidelity are in the process of filing or amending proposals to enable staking in their Ethereum ETFs, but no payouts have been declared yet. The industry is waiting to see if Grayscale's model will become a standard or if alternative structures will emerge.

Grayscale's CEO, Peter Mintzberg, emphasized the significance of the distribution, calling it a "landmark moment" for the Ethereum community and ETPs. The move reinforces Grayscale's leadership in digital asset innovation and highlights the growing maturity of the crypto investment landscape.