Grayscale’s ETHE Offers First US Ethereum ETP Staking Rewards

Grayscale Investments has reached a significant milestone in the cryptocurrency exchange-traded products space. On January 6, its Ethereum Staking ETF (ETHE) distributed staking rewards of $0.083178 per share to shareholders. This marks the first instance of a U.S.-listed spot Ethereum exchange-traded product (ETP) passing on-chain yields directly to investors.

The payout, totaling approximately $9.4 million, covered rewards from October 6, 2025, to December 31, 2025. Shareholders on record as of January 5, 2026, received these funds.

US Gets First Ethereum Staking ETP

The distribution of funds is derived from the sale of accrued staking rewards. Grayscale periodically sells these rewards and distributes the proceeds to investors, while maintaining the total amount of Ether held. The initial payout will cover the period starting from when staking began on October 6, 2025.

Future payments will be made monthly and will be based on profits after fees are deducted. The fund retains its primary Ether holdings while distributing income from staking to shareholders. ETHE is designed as an exchange-traded product rather than a traditional ETF, which gives it greater flexibility. 

Grayscale started staking for ETHE and its smaller version, ETH, in October 2025. On January 5, 2026, it changed the names of these funds to highlight this feature. The decision makes regulated investments more aligned with blockchain-based economics.

Broader Implications and Risks

The move sets a new standard that may encourage competitors like BlackRock and Fidelity to speed up the development of staking features in their Ethereum offerings. It brings U.S. crypto ETPs closer to similar products in Europe and direct staking options. These yield-bearing products may attract investors seeking income amid volatile crypto markets. 

In addition, institutional interest in Ethereum may rise due to yield benefits; however, staking involves risks. Locked Ether can become illiquid and subject to price fluctuations, while network issues and smart contract risks can lead to earnings loss or principal loss. 

It is also important to note that the fund does not have the protections offered by traditional ETFs under the 1940 Act. High fees can reduce your earnings, and shares may trade at prices above or below their actual value. Despite these concerns, the recent milestone indicates progress in the development of crypto ETPs while stressing the need for careful risk evaluation.

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