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Will the SEC Approve Grayscale’s Ethereum ETF Staking Proposal?

Staking within ETFs could boost investor returns through passive income.

The SEC’s decision will set a key precedent for staking in regulated products.

The U.S. Securities and Exchange Commission (SEC) is reviewing a proposal from Grayscale Investments to include staking in its proposed Ethereum ETFs. If approved, this could change how investors engage with Ethereum.

The proposal was officially acknowledged by the SEC after NYSE Arca submitted it on February 14, 2025. This started the review process, which included a public comment period. The SEC has 45 days to make an initial decision, but this can be extended to 90 days. If approved, investors could earn staking rewards while holding shares of the Ethereum ETF.

Staking is a central component of decentralized finance (DeFi). It involves locking up crypto to support a blockchain network with participants earning rewards. Grayscale aims to integrate staking into the regulated ETF framework, potentially bridging traditional finance and DeFi.

“Unlike Bitcoin, Ethereum is not a finite token. Therefore, staking is arguably the biggest value proposition of ETH to major investors,” according to the filing. This suggests staking could attract more investors to Ethereum ETFs. ETFs offer a familiar structure for yield generation. This could draw in institutions previously wary of direct staking.

Grayscale plans to stake Ethereum through trusted providers. The ETF sponsor will manage this. Coinbase Custody will continue to hold the fund’s Ethereum. This approach balances innovation with regulatory needs.