Grayscale launches first US staking-enabled spot crypto ETPs

North America
Source: CointelegraphPublished: 10/06/2025, 08:45:00 EDT
Grayscale
Ethereum
Solana
Crypto ETPs
Staking
Digital Assets
Grayscale launches first US staking-enabled spot crypto ETPs

News Summary

Crypto asset manager Grayscale has introduced staking functionality for its exchange-traded products (ETPs), making it the first US-based crypto fund issuer to offer staking-based passive income opportunities. Grayscale announced Monday that 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. The company also stated that its Solana (SOL) fund, the Grayscale Solana Trust (GSOL), has enabled staking and is awaiting regulatory approval for uplisting to an ETP, which would make it the first spot Solana ETP to offer staking. Grayscale CEO Peter Mintzberg noted the company aims to offer investors exposure to the long-term value accrual of these networks while maintaining the funds' core objectives by enabling staking across its Ethereum and Solana products. Both ETHE and ETH are registered under the Investment Company Act of 1940, implying they are not subject to the same regulations as crypto ETFs registered under the same act.

Background

Grayscale is one of the world's largest digital asset managers and has long been a pivotal player in the crypto investment space, known for products like its Grayscale Bitcoin Trust (GBTC). Its successful conversion of GBTC into a spot Bitcoin ETF in late 2024 marked a significant milestone for the US crypto ETF market. Staking is a mechanism on Proof-of-Stake (PoS) blockchains, such as Ethereum 2.0 and Solana, where investors lock up their crypto assets to support network operations and earn rewards. This mechanism offers potential passive income for crypto asset holders. While the Trump administration in 2025 might generally favor innovation in crypto, the U.S. Securities and Exchange Commission (SEC) remains cautious about regulating crypto products, especially those involving "yield" or "interest," particularly after past issues with crypto lending platforms. Grayscale's current move leverages its funds' registration under the 1940 Act, which differs from most spot crypto ETFs (typically registered under the 1933 Act), affording it greater operational flexibility.

In-Depth AI Insights

What are the strategic implications for Grayscale and the broader crypto ETP market? - Grayscale's "first-mover" advantage in offering staking could provide significant differentiation and market share in the competitive crypto asset management landscape. - This innovation may pressure other fund issuers to explore similar staking-enabled products, accelerating the evolution of the crypto ETP market and potentially leading to a "yield race." - The move could also prompt regulators to provide clearer guidance on staking within ETPs registered under the 1933 Act, as Grayscale's 1940 Act registration might offer a different regulatory pathway. How does this innovation impact institutional adoption and the risk profile for investors? - The potential for additional yield from staking could attract a broader range of institutional investors accustomed to yield-generating products in traditional finance, thereby accelerating the institutionalization of crypto as an alternative asset class. - However, for investors seeking passive income, staking introduces new dimensions of risk, such as smart contract vulnerabilities, "slashing" penalties, and liquidity lock-ups, which may not be fully understood or appreciated by all. - Grayscale's addition of staking to its products, as a regulated entity, might mitigate some perceived risks, but the underlying protocol risks remain. What potential regulatory headwinds or tailwinds could this initiative face under the Trump administration in 2025? - The Trump administration may lean towards market-driven innovation and reduced regulatory burdens, potentially creating a favorable policy environment for Grayscale's staking ETPs, avoiding excessive intervention. - Nevertheless, the SEC and its chair (if incumbent) might remain vigilant regarding "yield" products concerning consumer protection and market integrity, especially given the volatile history of the crypto market. - Regulators will likely scrutinize the transparency, risk disclosures, and suitability of these products for retail investors to prevent a repeat of past crypto lending platform collapses. However, outright prohibitions are less likely than enhanced disclosure and compliance requirements, given the general support for crypto innovation.