The race for Ethereum yield has officially begun. Grayscale Investments distributed approximately $9.4 million in staking rewards to shareholders of its Ethereum Staking ETF (ETHE) and Mini ETF (ETH) this week, marking the first time a U.S.-listed spot crypto product has passed on-chain yield directly to investors.
While industry giants like BlackRock and Fidelity remain entangled in regulatory delays regarding their own staking amendments, Grayscale utilized its specific product structure to execute the payout first. The distribution, finalized on January 6, paid out $0.083178 per share in cash, derived from staking rewards earned between October 6 and December 31, 2025.
The Mechanics of the Payout
Grayscale did not distribute Ether. Instead, the firm monetized the staking rewards (selling the accrued ETH) and distributed the proceeds as a cash dividend. This method bypasses the complex tax and custody implications of distributing raw tokens to brokerage accounts, effectively treating the ETF as a yield-bearing instrument similar to a dividend stock.
The payouts signal a fundamental shift in how institutional products frame Ethereum. No longer just a speculative store of value, ETH is being repackaged as a productive asset capable of generating cash flow.
"Distributing staking rewards to ETHE shareholders is a landmark moment… reinforcing Grayscale’s role as an early leader in bringing new digital-asset capabilities into the ETP wrapper." Peter Mintzberg, Grayscale CEO
Regulatory Arbitrage
The speed of Grayscale’s move highlights a regulatory divergence. Competitors like BlackRock (ETHA) and Fidelity (FETH) filed amendments to add staking capabilities in mid-2025, but the SEC delayed decisions on these proposals until late October 2025. As of early 2026, many standard spot ETFs are still waiting for the definitive green light to switch on staking.
Grayscale’s funds, which operate as ETPs not registered under the Investment Company Act of 1940, leveraged this distinct regulatory status to activate staking in October 2025, effectively front-running the broader market. This forces a decision point for the SEC: continue blocking staking for 1940-Act adhering funds while competitors like Grayscale capture the yield-hungry institutional market.
Following the payout, Ethereum (ETH) traded near $3,110, up 1% on the day, as the market began pricing in the reality of yield-bearing crypto products becoming standard.
