TLDR
- Grayscale deposited 32,000 ETH valued at $150 million after enabling staking on its Ethereum exchange-traded products
- The asset manager became the first US firm to offer staking rewards through registered crypto ETPs on October 6
- Grayscale’s ETHE collected $14.8 million while ETH brought in $18.7 million in first-day inflows
- BlackRock’s ETHA dominated with $92 million in inflows and $2 billion in trading volume on the same day
- The SEC has 16 crypto ETP decisions scheduled for October including staking amendments from 21Shares and BlackRock
Grayscale transferred 32,000 Ether tokens worth $150 million to staking validators on October 7. The deposit occurred one day after the firm activated staking features for its Ethereum exchange-traded products.
The crypto asset manager made history as the first US company to provide staking income through registered ETPs. The feature applies to both the Grayscale Ethereum Trust (ETHE) and Grayscale Ethereum Mini Trust (ETH).
Blockchain analytics platform Lookonchain tracked the 32,000 ETH transfer. The staked Ethereum will generate validator rewards for fund shareholders.
According to Grayscale’s staking policy, ETHE investors will receive up to 77% of staking rewards after fees. ETH shareholders will earn approximately 94% of rewards due to lower management costs.
The two funds distribute rewards through different methods. ETHE provides cash distributions to investors seeking regular income. ETH reinvests staking returns into the fund’s net asset value for compound growth.
Both products operate under the Securities Act of 1933 as exchange-traded products. This structure differs from traditional ETFs registered under the Investment Company Act of 1940.
Grayscale Trails Competitors in First-Day Inflows
The staking launch failed to attract major institutional interest on debut day. ETHE recorded $14.8 million in inflows while ETH captured $18.7 million on October 6.
BlackRock’s iShares Ethereum Trust (ETHA) led all Ethereum ETFs with $92 million in new investments. The fund also processed $2 billion in trading volume and added 18,959 ETH to its holdings.
Bitwise ETHW finished second with $27 million in inflows. Grayscale’s two products ranked last among major US Ethereum ETF issuers for the trading session.
Ethereum climbed 4% to surpass $4,700 after the staking announcements. Crypto analysts predict further price increases in the coming weeks.
SEC Reviews Multiple Staking Applications
The Securities and Exchange Commission must decide on 16 crypto ETP filings during October. Two applications request approval for Ethereum staking capabilities.
21Shares submitted its Core Ethereum ETF staking proposal with an October 23 deadline. BlackRock filed an amendment to add staking rewards to ETHA with an expected October 30 response date.
Rex-Osprey launched a Solana staking ETF in July under the 1940 Act framework. Grayscale’s Solana Trust activated staking and awaits regulatory approval for ETP conversion.
The current government shutdown could delay SEC decisions on crypto applications. The agency stated it would function with minimal staff until Congress approves new funding legislation. Senate leaders planned to reconvene after five unsuccessful funding votes.
Crypto exchange-traded products attracted record inflows of $5.95 billion last week. The government shutdown drove increased demand for digital assets and decentralized investment options.
