Grayscale, one of the world’s leading cryptocurrency asset managers, appears poised to begin staking a significant portion of its Ether holdings, suggesting growing confidence in the impending approval of staking within US-regulated exchange-traded products (ETPs).

On-chain data from Arkham Intelligence revealed that Grayscale transferred over 40,000 ETH this past Thursday. This activity aligns with intentions to earn staking rewards, and if verified, would mark Grayscale as the first US-based Ethereum ETF sponsor to stake its assets publicly.

Source: Emmett Gallic

Currently, Grayscale’s Ethereum Trust (ETHE) manages more than 1.06 million ETH, worth over $4.8 billion. Since launching in 2017 as a private placement, the firm introduced the Ethereum Mini Trust earlier this year as a more affordable investment vehicle, expanding its offerings amid evolving market conditions.

This development follows the US Securities and Exchange Commission’s (SEC) recent decision to delay rulings on whether Grayscale funds could incorporate ETH staking. The regulator has hinted that some liquid staking methods may fall outside its jurisdiction, potentially opening doors for regulated crypto funds to earn staking rewards lawfully.

While Grayscale has submitted proposals to enable staking within its funds, the SEC has yet to approve these. The company’s strategic move to stake assets beforehand suggests it’s positioning itself for future regulatory clarity. Notably, no existing spot Ether ETFs currently feature staking functionalities.

The on-chain transfer emerged shortly after the SEC approved Grayscale’s Digital Large Cap Fund, which offers exposure to multiple assets including Bitcoin, Ether, XRP, Solana, and Cardano. This multi-asset ETF allows investors to diversify their cryptocurrency holdings through a single investment vehicle, bypassing the need to acquire individual tokens directly.

Ethereum staking ETFs could reshape the crypto markets, experts say

Industry analysts believe that regulatory approval of staking within US spot Ether ETFs could significantly impact institutional demand. Such products would allow investors to earn staking rewards while holding Ethereum, promoting a shift from passive ownership to active engagement.

Markus Thielen, head of 10x Research, noted in July that Ethereum ETF staking could “dramatically reshape the market,” amid rising demand for ETH. Recent data shows ETF inflows have surged this year, while Ether reserves across exchanges plummeted to a three-year low, reflecting institutional activity and increasing adoption by corporate treasuries.

Ether exchange reserves across all crypto exchanges. Source: CryptoQuant

The potential for ETH staking within regulated ETFs highlights a pivotal shift toward more integrated and yield-generating investment strategies within the crypto market, reinforcing Ethereum’s growing role in the evolving landscape of digital assets and DeFi applications.