Ethereum News Today: Grayscale Activates Staking for Ethereum ETFs, Offering Yield and Reshaping Liquidity

Grayscale Investments has added 857,600 ETH ($3.88 billion) to its Ethereum spot ETFs, bringing total deposits to 1,161,600 ETH. The firm activated staking for its Grayscale Ethereum Trust ETF (ETHE) and Grayscale Ethereum Mini Trust ETF (ETH) in October 2025, allowing investors to earn on-chain rewards through institutional custodians and a diversified validator networktitle1^[1]. This move marks the first time U.S.-listed spot crypto ETPs offer staking capabilities, enabling shareholders to participate in Ethereum's proof-of-stake mechanism while maintaining exposure to ETH's price movementstitle2^[2].

The staking feature reduces the freely circulating supply of ETH within the ETF structure, potentially tightening liquidity and amplifying price volatility. By locking assets into staking, Grayscale aims to generate yield for investors, with rewards distributed subject to fees and operational policies. Institutional custody and validator diversification are designed to mitigate single-point risks, a critical consideration for regulatory compliance and operational resiliencetitle1^[1]. The firm also activated staking in its Grayscale Solana Trust (GSOL), pending regulatory approval to convert it into an ETFtitle2^[2].

Ethereum ETFs have gained momentum despite trailing Bitcoin products in assets. As of October 2025, Ethereum ETFs held $30 billion in assets, or 6% of ETH's market value, compared to $165 billion for Bitcoin ETFs (7% of BTC's market value)title1^[1]. However, recent inflows have narrowed the gap. CoinShares reported $1.5 billion in Ethereum fund inflows during a single week in October, reversing prior outflows and signaling growing institutional demandtitle1^[1]. Grayscale's staking innovation has emerged as a key differentiator, offering yield potential that traditional Ethereum trusts lacktitle2^[2].

The SEC's regulatory stance on staking remains a critical factor. While the agency approved options trading for Ethereum ETFs in April 2025, it delayed decisions on staking applications until June 2026. Grayscale staked 32,000 ETH ($150.56 million) ahead of regulatory deadlines, signaling confidence in the long-term viability of staking-based ETPstitle3^[3]. The firm's CEO, Peter Mintzberg, emphasized that staking aligns with Grayscale's mission to innovate in digital asset investing, leveraging its scale and institutional infrastructure to secure network resiliencetitle2^[2].

Market observers highlight several dynamics to monitor. First, the proportion of ETF holdings staked will influence liquidity and price behavior. Higher staking rates reduce free float, potentially amplifying rallies or drawdowns during periods of strong demandtitle1^[1]. Second, net inflows remain a key driver. Sustained inflows could increase staked ETH and shift supply dynamics, while outflows may reverse these effects. Third, validator performance and concentration will impact reward reliability, with diversified validator sets reducing slashing risks and downtimetitle1^[1]. Finally, product design elements-such as compounding rules and fee structures-will shape after-fee yields, influencing investor preferencestitle1^[1].

The integration of staking into Ethereum ETFs reflects broader shifts in crypto asset management. As Grayscale expands its staking capabilities, it joins competitors like BlackRock in competing for market share. The firm's approach-combining institutional-grade security with yield generation-could redefine how investors access digital assets. However, regulatory clarity on staking's legal classification remains a hurdle. The SEC's final decision on Grayscale's applications will set a precedent for future yield-bearing crypto ETPs in the U.S. market.