Grayscale ETHE Distributes Staking Rewards in First-Ever US Crypto ETP Move

Grayscale has issued the first-ever staking rewards from a U.S.-listed spot crypto ETP. The Ethereum Staking ETF (ETHE) will pay shareholders $0.083178 per share, totaling $9.4 million in cash. The payout covers staking rewards earned between October 6, 2025, and December 31, 2025 according to Cryptonews.

The distribution marks a structural shift for crypto-based financial products in the U.S. By converting staking rewards to cash, the move simplifies tax reporting for investors and turns a spot ETH ETF into a yield-bearing instrument. This could attract a new class of income-focused investors.

ETHE is now the first U.S. ETP to distribute Ethereum staking rewards to shareholders. The distribution reflects Grayscale's implementation of staking within an ETP framework. It allows network-level rewards to be converted into cash proceeds for investors.

Why the Move Happened

Grayscale activated staking for its Ethereum products in October 2025. This move made ETHE and the Grayscale Ethereum Staking Mini ETF the first U.S. spot crypto ETPs to gain exposure to Ether staking. The firm has since renamed these funds to reflect their staking functionality.

The Ethereum Staking ETF holds Ether but is not registered under the Investment Company Act of 1940. This regulatory structure allows staking but comes with different risk profiles than traditional ETFs. It also enables greater flexibility in implementing yield-generating features.

Grayscale CEO Peter Mintzberg emphasized the significance of the payout. He called it a landmark moment for both the company and the Ethereum community. The move reinforces Grayscale's leadership in integrating digital-asset capabilities into ETPs.

How Markets Responded

ETHE shares were trading around $26.47 at the time of the announcement, while Ethereum (ETH) was priced at approximately $3,299. The fund was up about 2% in early trading, according to Yahoo Finance.

The cash-based payout model simplifies the reporting of staking income for investors. By distributing rewards in cash rather than increasing the fund's Ether holdings, Grayscale ensures clarity in tax treatment. This could make staking more accessible to a broader range of investors.

The move could also trigger a shift in the competitive landscape for Ethereum ETFs. Rivals such as BlackRock and Fidelity are exploring similar staking features. BlackRock registered a staked Ethereum trust in November 2025, while Fidelity has filed to add staking to its fund.

What Analysts Are Watching

Analysts are observing whether this payout will lead to a wider adoption of staking-enabled Ethereum ETFs. The ability to generate yield may differentiate these products from traditional ETFs that only track price appreciation. This could attract more institutional and retail investors.

Investor education and transparency remain central to Grayscale's strategy. The firm stated it will continue to prioritize these aspects as staking becomes more integrated into crypto investment vehicles. Future payouts will depend on staking performance and market conditions.

The broader market is also watching for regulatory developments. The U.S. Securities and Exchange Commission has not yet approved a spot Ethereum ETF. However, Grayscale's move may set a precedent for how such products could operate within a regulated framework.