Crypto asset manager Grayscale has introduced staking for its exchange-traded products (ETPs), becoming the first US-based crypto fund issuer to offer staking-based passive income opportunities.
Grayscale said on Monday its Ether (ETH) ETFs — the Grayscale Ethereum Mini Trust ETF (ETH) and Grayscale Ethereum Trust ETF (ETHE) — are now the first US-listed spot crypto funds to offer staking, calling the development “another first-mover milestone.”
Grayscale’s Solana (SOL) fund, the Grayscale Solana Trust (GSOL), has also enabled staking and is awaiting regulatory approval for uplisting to an ETP, which would make it one of the first spot Solana ETPs to enable staking, according to the company’s Monday X post.
By enabling staking across its Ethereum and Solana products, Grayscale said it aims to give investors exposure to the “long-term value accrual of these networks while maintaining the funds’ core objectives.”
“Staking in our spot Ethereum and Solana funds is exactly the kind of first mover innovation Grayscale was built to deliver,” said Grayscale CEO Peter Mintzberg. “As the #1 digital asset-focused ETF issuer in the world by AUM, we believe our trusted and scaled platform uniquely positions us to turn new opportunities like staking into tangible value potential for investors.”
Both ETHE and ETH are exchange-traded products registered under the Securities Act of 1933, not the Investment Company Act of 1940, the latter being the regulatory framework used for traditional mutual funds.
This makes them structurally different from ETFs governed by the 1940 Act, though they follow the same legal framework used for spot Bitcoin (BTC) and Ether ETFs.
“ETHE and ETH hold digital assets; however, an investment in ETHE and ETH is not a direct investment in digital assets,” Grayscale said.
Grayscale said it will stake via institutional custodians and a diversified network of validator providers and that investors can access the products through standard brokerage accounts
Grayscale reported about $35 billion in assets under management as of Sept. 30.
Related: Aging boomers and global wealth seen boosting crypto until 2100
Crypto industry awaits SEC approval of staking ETFs
The news comes as the industry awaits US Securities and Exchange Commission (SEC) regulatory approval of the first US-listed Ether staking ETFs.
The approval of the first Ether staking ETF may bring significant new institutional capital for the crypto industry, according to 10x Research’s head of research, Markus Thielen.
“This would mark a monumental structural shift in how institutional capital flows into Ethereum, unlocking a new era of yield-driven participation,” Thielen told Cointelegraph.
Related: Japan’s new PM may be a boon for risk assets, crypto markets
The development comes three months after the REX-Osprey Solana Staking ETF debuted on the Cboe BZX Exchange, recording $33 million in trading volume and $12 million in inflows on its opening day, Cointelegraph reported on July 3.
Rex-Osprey’s fund was the first to launch a Solana staking ETF under the Investment Company Act of 1940, which allows crypto ETFs to hold the majority of their spot assets directly and distribute staking rewards where applicable.
More broadly, spot Bitcoin and Ether ETPs in the US have been approved through exchange rule filings (Rule 19b-4) and Securities Act registration, not under the 1940 Act. The SEC has also recently permitted in-kind creations and redemptions for some crypto ETPs.
Magazine: Can Robinhood or Kraken’s tokenized stocks ever be truly decentralized?
