Grayscale's Ethereum ETF Begins Paying Staking Rewards to Shareholders

Grayscale has become the first U.S.-listed Ethereum exchange-traded product (ETP) to distribute staking rewards to shareholders. The Grayscale Ethereum Staking ETF (ETHE) made a distribution of $0.083178 per share to shareholders on January 6, 2026, reflecting proceeds from the sale of staking rewards earned between October 6, 2025 and December 31, 2025. This marks a significant milestone for the digital asset investment space in the United States.

The payout was calculated based on the ownership of ETHE shares as of January 5, 2026. Investors received the amount per share based on their holdings. This development highlights the integration of Ethereum staking into the ETP structure, a first in the U.S. market.

ETHE and its related product, the Grayscale Ethereum Staking Mini ETF (ETH), previously operated as Grayscale Ethereum Trust ETF and Grayscale Ethereum Mini Trust ETF, respectively. The funds were renamed in January 2026 to reflect their staking capabilities.

Why Did This Happen?

Grayscale activated staking for its Ethereum products on October 6, 2025, making ETHE and ETH the first U.S. spot crypto ETPs to gain exposure to Ether staking. This activation allowed the funds to lock up Ether on a proof-of-stake blockchain to validate transactions and earn rewards. The rewards were then sold and distributed to shareholders.

The move was part of Grayscale's broader strategy to expand staking capabilities into its product offerings. The company aims to bring the economic upside of digital asset innovations directly to investors. CEO Peter Mintzberg emphasized that the distribution reinforces Grayscale's role as a leader in integrating new digital-asset capabilities into the ETP wrapper.

How Did Markets React?

Grayscale ETHE shares traded ex-dividend on January 6, 2026. Investors who purchased shares after market open that day were not entitled to receive the payout. This ex-dividend event is a standard market practice, ensuring that only existing shareholders as of the record date receive the distribution.

The ETF's performance in the days leading up to the payout was positive. According to market data, ETHE was up around 2% in early-day trading. This upward movement may reflect investor optimism about the new staking feature and the potential for recurring payouts.

What Are Analysts Watching Next?

Analysts are monitoring how this development affects the broader Ethereum ETP landscape. Grayscale is currently the only U.S. issuer offering staking-related payouts. However, several major asset managers are awaiting regulatory approval to launch their own staking-enabled Ethereum ETFs.

In March 2025, Cboe BZX filed a proposal to add staking to the Fidelity Ethereum Fund, followed by similar filings for the 21Shares Core Ethereum ETF. These efforts indicate a growing interest in integrating staking into U.S. ETF structures. If approved, these products could introduce increased competition and drive innovation in the market.

Grayscale's ability to activate and distribute staking rewards without regulatory pushback is also being closely observed. The company's success may serve as a blueprint for other issuers seeking to navigate the regulatory environment for staking-enabled products. Analysts note that Grayscale's approach—emphasizing security, transparency, and risk disclosure—could influence future regulatory expectations.

The distribution model itself is another area of interest. Grayscale has chosen to distribute staking rewards in cash form, but shareholders may also receive them as additional shares of ETHE. This flexibility caters to different investor preferences and strategies, potentially broadening the appeal of the product.

The move has already had a measurable impact on ETHE's valuation. Historically, ETHE traded at a discount to its net asset value (NAV). The promise of staking rewards has helped narrow this discount, making the product more attractive to yield-focused investors. This shift could lead to increased demand and further support for the ETF's share price.

Broader Implications and Investor Considerations

The introduction of staking rewards in a U.S.-listed ETP is a significant step toward aligning traditional investment structures with the economic features of proof-of-stake blockchains. For Ethereum, this means investors can now access the native yield-generating capabilities of the network through a regulated and familiar investment vehicle.

However, the product is not without risk. Grayscale notes that staking involves potential for illiquidity and security risks. Staked Ether is locked up for a period, and during this time, the fund cannot sell or transfer the assets. Additionally, staking exposes the funds to potential network vulnerabilities, including smart contract failures and validator compromises.

Investors should also be aware that ETHE and ETH are not registered under the Investment Company Act of 1940. As a result, they operate under a different regulatory framework than traditional ETFs and mutual funds. This distinction may affect the level of investor protections available.

Despite these risks, the move has been widely praised as a milestone in the evolution of crypto investment products. Grayscale's approach has been described as a bridge between traditional finance and the digital asset ecosystem. As the market continues to evolve, the firm's leadership in this space may position it to attract a broader range of investors, including those seeking yield and long-term exposure to Ethereum.