Grayscale’s Ethereum ETFs Stake $150M but See Slow Inflows

view original post

The Grayscale Ethereum Trust (ETHE) will pay staking rewards as cash distributions to investors seeking regular income. Meanwhile, the Grayscale Ethereum Mini Trust (ETH) will reinvest staking rewards into its net asset value (NAV), enabling compound growth over time. This design offers investors flexibility between income and reinvestment options.

The total 32,000 ETH staked across both funds signals early participation, though expectations for higher inflows didn’t match. Some analysts feel that yield alone is not the deciding factor for institutional investors. Many are still prefering direct exposure to Ethereum’s price performance over modest staking returns of 2% to 4%.

Regulatory developments also played a major role in this launch. For years, US regulators hesitated to allow staking features within exchange-traded products. There were concerns whether staking could be considered an unregistered securities offering. Recent guidance from the U.S. Securities and Exchange Commission (SEC), however, clarified that staking can be permitted if properly structured under general listing standards. This clarity paved the way for Grayscale’s ETF integration.