Thomas Daniels
The U.S. Securities and Exchange Commission (SEC) has deferred its decision regarding Grayscale Investments’ proposal to integrate Ethereum staking into its spot exchange-traded funds. The affected funds include the Grayscale Ethereum Trust ETF and the Grayscale Ethereum Mini Trust ETF. The regulatory agency extended its review deadline to June 1, 2025, with a final decision anticipated by the end of October.
Grayscale submitted its application on February 14, 2025, through the New York Stock Exchange, proposing a rule change to permit staking within its Ether-based ETFs. The initiative would allow investors to earn passive rewards through Ethereum’s proof-of-stake protocol. Under the proposal, Grayscale would serve as the sponsor overseeing staking, while Coinbase Custody would manage custody operations, ensuring asset segregation.
The SEC’s delay highlights its cautious stance on incorporating staking features into U.S.-based ETFs—a move that has yet to be approved for any digital asset fund. Nonetheless, the agency recently approved options trading for multiple spot Ether ETFs, including products from BlackRock, Bitwise, and Grayscale. This milestone expands the utility of these funds, particularly for institutional investors leveraging derivatives strategies.
Despite these advancements, Ether ETFs have struggled to match the adoption levels seen in Bitcoin ETFs. As of April 11, 2025, Ether ETFs reported cumulative net inflows of $2.2 billion, in stark contrast to the $35.4 billion attracted by Bitcoin ETFs since their January 2024 debut.
Staking remains a critical component in the Ethereum ecosystem, offering yields that currently range from 2.4% on Coinbase to between 2% and 7% on Kraken. These returns could enhance the appeal of Ether ETFs by introducing a yield-generating feature. Several other asset managers, including BlackRock’s 21Shares iShares Ethereum Trust, have also filed for permission to incorporate staking, and await regulatory approval.
Ethereum’s performance in the ongoing bull market has lagged behind major competitors such as Solana and XRP. The asset has failed to break its all-time high of $4,866 set in November 2021, with prices trading below the $2,000 mark as of April 14, 2025.
Market analysts suggest the SEC’s position may be influenced by upcoming leadership changes. The potential confirmation of Paul Atkins, a figure seen as more supportive of digital assets, as SEC Chair could signal a shift in the regulatory landscape for crypto-linked financial products.
The next few months will be pivotal for the evolution of Ether ETFs in the U.S., as the SEC weighs the integration of staking mechanisms that could transform how investors interact with Ethereum in traditional finance channels.
