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Could this Ethereum staking rule change keep Grayscale ETFs from bleeding out?

Could this Ethereum staking rule change keep Grayscale ETFs from bleeding out?

DLNewsDLNews2025/02/15 02:21
By:Kyle Baird

Ethereum ETFs have been heating up this month, but Grayscale funds are still struggling.

NYSE Arca has filed a proposed rule change to allow the Grayscale Ethereum Trust and Ethereum Mini Trust — ETHE and EZET respectively — to stake their ether holdings.

The proposed change, if approved, would enable the trusts to stake ETH through trusted staking providers, earning rewards while keeping assets under the custody of their current custodian.

Unlike staking-as-a-service models targeted by the Securities and Exchange Commission, Grayscale argues its approach is designed solely to benefit fund shareholders and does not involve pooling assets with third parties.

Industry advocates have pushed for staking in ETFs, arguing that “including staking as a feature in certain ETPs will benefit investors, more accurately reflect the benefits of native network assets, and permit issuers to support the security of the networks in which the assets operate,” according to a memorandum submitted by Jito Labs and Multicoin Capital to the SEC Crypto Task Force.

This could also help attract investors amid stiff competition from rival spot Ethereum exchange-traded funds.

Ethereum ETF market

Ethereum’s proof-of-stake model already allows holders to earn yield, and institutional investors may increasingly look for ETFs that offer staking benefits.

If approved, the rule change could help stem outflows from ETHE and boost EZET’s appeal by enabling the funds to generate additional ETH returns.

With Ethereum gaining ground on Bitcoin in ETF flows, Grayscale’s bid to integrate staking could be a crucial test of whether staking-enabled ETFs can gain a competitive edge in the market.

Since the approval of spot Ethereum ETFs, ETHE has seen nearly $4 billion in outflows, making it the largest loser among ETH investment products.

Meanwhile, EZET has struggled to gain traction, pulling in just $650 million in inflows—one of the smallest among Ethereum ETFs with net gains.

By contrast, other Ethereum spot ETFs, such as BlackRock’s and Fidelity’s, have seen significant inflows, largely due to their lower fees and institutional backing.

Ethereum ETFs as a whole recorded $793 million in inflows for the first week of February, surpassing Bitcoin for the first time in 2025, per CoinShares.

Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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