Grayscale has become the first U.S. firm to distribute Ethereum staking rewards through an exchange-traded product, marking a major milestone for crypto ETFs and investor access to on-chain yields.
Key Takeaways
- Grayscale’s Ethereum Staking ETF (ETHE) paid $0.083178 per share in staking rewards to eligible investors, covering earnings from October to December 2025.
- This is the first time a U.S.-listed crypto ETF has passed staking income to shareholders, turning on-chain yield into cash payouts.
- The ETF’s structure remains unchanged, with ETH holdings intact and rewards paid via ETH staking proceeds sold for cash.
- The move coincides with renewed investor interest and positive inflows into Ethereum ETFs, signaling improved market sentiment.
What Happened?
Grayscale has officially distributed staking rewards from its Ethereum Staking ETF, making it the first regulated crypto investment product in the United States to offer such income. The payout is the result of staking activities from October 6 to December 31, 2025, and was issued in cash to investors as of the record date, January 5. The payment of $0.083178 per share was completed on January 6.
Today, Grayscale Ethereum Staking ETF (Ticker: $ETHE) became the first U.S. Ethereum ETP to distribute staking rewards back to investors.
— Grayscale (@Grayscale) January 5, 2026
Note: $ETHE is trading ex-dividend today as of the open.
Read the press release: https://t.co/oDOSk9B2pG
First U.S. ETH Staking Payout
Grayscale’s move represents a pioneering step for regulated crypto investments in the U.S. market. The firm announced that staking rewards generated by its Ethereum Staking ETF (ETHE) were sold and converted into cash, which was then distributed to shareholders. Importantly, the fund’s Ethereum holdings were not reduced during this process, maintaining its core asset base.
- Payout value: $0.083178 per share.
- Covered period: October 6 to December 31, 2025.
- Total distribution: approximately $9.4 million.
- Record date: January 5, 2026.
- Payment date: January 6, 2026.
The distribution highlights the possibility of merging blockchain-native rewards like staking income with traditional financial instruments. ETHE and its companion fund, ETH (Ethereum Staking Mini ETF), both support staking since October 2025 and were renamed in early January to reflect their upgraded functionality.
Why This Matters for Ethereum ETFs?
The ability to distribute Ethereum staking rewards directly to shareholders could reshape how institutions evaluate ETH-based investment products. Until now, U.S.-listed spot Ethereum ETFs lacked a direct yield mechanism, limiting their appeal compared to other yield-generating assets.
Grayscale’s ETFs are not registered under the Investment Company Act of 1940, which means they operate with greater flexibility but also higher risk. These include:
- Potential validator performance issues.
- Network reliability concerns.
- Smart contract vulnerabilities.
- Lock-up periods affecting liquidity.
Despite these risks, analysts see the payout as a key milestone for mainstream adoption. Grayscale has emphasized that future distributions will depend on staking performance and market conditions, and no regular payout schedule is guaranteed.
ETF Inflows Show Renewed Market Confidence
The timing of the staking rewards coincides with positive inflows into Ethereum ETFs, reversing a trend of outflows and market stress observed in late 2025. Data from SoSoValue showed that net weekly inflows are back in the green, suggesting improving investor sentiment.
- U.S. Ethereum ETFs saw $2.8 billion in outflows since peak inflows of $15 billion.
- Current net assets across crypto ETFs are approaching $19 billion.
- Grayscale’s staking move may have encouraged institutional accumulation, even as markets remain volatile.
Other firms like BlackRock and Fidelity have also filed Ethereum staking-related proposals, although they have yet to initiate distributions.
CoinLaw’s Takeaway
In my experience watching crypto ETFs evolve, this is the kind of move that really pushes the envelope. Grayscale just proved that staking rewards don’t have to stay locked inside the crypto world. They can now flow into traditional investment products in a way that feels familiar to institutions and retail investors alike. That’s huge.
What stands out most is not just the technical execution but the signal it sends: Ethereum is maturing, and ETFs are catching up. I found the timing pretty strategic too. As sentiment begins to recover from recent crypto volatility, this kind of payout could give investors one more reason to come back in.
