21Shares to Distribute Staking Rewards to Ethereum ETF Holders

21Shares announced the distribution of staking rewards for the 21shares Ethereum ETF (TETH) to its shareholders. The amount per share is $0.010378, with a record date of January 8, 2026, and a payable date of January 9, 2026. This move follows the activation of staking functionality for the fund earlier in 2025.

The distribution stems from staking rewards earned on the Trust's Ethereum holdings, and it marks the latest development in the growing adoption of staking capabilities in crypto ETPs. Investors who own TETH as of the record date will receive the payout on January 9, 2026. The announcement also reiterated the risks of investing in ether and the Trust.

This development comes as other major players, like Grayscale, also begin to distribute Ethereum staking rewards to their ETF shareholders. Grayscale's ETHE ETF distributed $0.083178 per share, making it the first U.S.-listed Ethereum ETP to pass through staking rewards to investors.

Why the Move Happened

The inclusion of staking rewards in Ethereum ETFs reflects the broader shift in the crypto market toward offering yield-based products. Staking allows investors to earn rewards for participating in network validation, which was previously a feature available only to those who directly owned and staked ether according to market analysis.

21Shares and Grayscale have been at the forefront of introducing these capabilities into ETPs. By doing so, they enable investors to benefit from the economic incentives of the Ethereum network without the technical and security complexities of managing staking infrastructure as reported by financial analysts.

This innovation also aligns with the growing demand for yield-generating investment vehicles. In a low-yield environment, the ability to earn staking rewards adds value to ETF products, making them more attractive to both retail and institutional investors.

How Markets Responded

Market reaction has been mixed, with Bitcoin and Ethereum ETF flows fluctuating in the past week. While Ethereum ETFs have seen continued inflows, Bitcoin ETFs recorded outflows for the first time in several days, reflecting shifting investor sentiment.

The announcement by 21Shares adds to the momentum in Ethereum ETFs, which have consistently attracted inflows as investors seek exposure to the second-largest cryptocurrency. TETH has seen smaller inflows compared to Grayscale's ETHE, but the product remains a key player in the space according to market data.

What Analysts Are Watching

Analysts are closely watching how staking rewards are integrated into the broader ETF structure. The ability to distribute these rewards without diluting the underlying Ethereum holdings represents a significant structural innovation. Grayscale's ETHE, for instance, sold the staking rewards and passed the cash proceeds to shareholders, preserving the fund's Ethereum exposure.

Regulatory considerations remain a key area of focus. ETHE and TETH are not registered under the Investment Company Act of 1940, which means they are subject to different oversight than traditional ETFs. This flexibility allows for faster implementation of new features like staking rewards but also exposes investors to additional risks as financial experts note.

Looking ahead, market participants will be watching for further developments in the Ethereum staking landscape. The success of these early distributions could pave the way for broader adoption of yield-generating strategies in ETPs, potentially reshaping how investors access and benefit from digital assets.

Additional Market Context

Ethereum's price has remained under pressure, trading below $3,300 on January 8, 2026. The broader market sentiment has also shifted, with the Crypto Fear & Greed Index at 42, indicating a bearish tone. However, Ethereum ETF inflows continue to grow, reflecting sustained interest in the asset class.

Staking rewards, combined with the growing institutional adoption of Ethereum, could provide a new tailwind for the cryptocurrency. While Bitcoin remains the dominant asset in the ETF space, Ethereum's unique ability to generate yield through staking gives it a distinct advantage in certain investment strategies.

The evolution of Ethereum staking in ETPs represents a significant step toward the integration of blockchain-native financial models into traditional investment frameworks. As the market matures, investors and regulators will likely continue to monitor these developments closely as analysts observe.