The cryptocurrency market has entered a new phase with the introduction of staking capabilities in spot crypto ETFs. Grayscale Investments has achieved a significant milestone by launching the first staking-enabled spot crypto ETFs in the United States, leveraging regulatory frameworks to establish on-chain staking participation channels. However, initial capital inflows have remained relatively modest despite this breakthrough. Grayscale’s Ethereum Trust ETF (ETHE) and Grayscale Ethereum Mini Trust ETF (ETH) have officially become the nation’s first spot crypto asset ETFs to support staking functionality. Additionally, the Grayscale Solana Trust (GSOL) has activated staking services, providing investors with exclusive access to SOL staking through traditional brokerage accounts. With pending regulatory approvals, GSOL is positioned to become among the first staking-enabled spot Solana ETPs. The company employs institutional-grade custodians, including Coinbase and Figment, working with diversified validator networks to implement passive staking. This approach supports underlying blockchain protocol security while enhancing network resilience. Regarding staking reward distribution, ETHE shareholders receive up to 77% of total staking rewards, with the remaining 23% allocated to issuers, custodians, and staking service providers. ETH investors benefit from a more favorable distribution, retaining 94% of rewards while service providers collect only 6%. Since activating staking capabilities, on-chain data reveals Grayscale has staked over 1.16 million ETH. Specifically, 49.46% of ETHE’s ETH holdings and 47.79% of ETH’s holdings have been staked. According to ValidatorQueue data, approximately 1.36 million ETH are currently queued for staking, with Grayscale’s staked ETH representing 85.4% of this total. While Grayscale’s staking integration addresses a critical gap in Ethereum spot ETF products by offering institutional investors new passive income opportunities, market response has been measured. SoSoValue data indicates ETHE experienced net outflows of $1.95 million since October 6, while ETH recorded net inflows of approximately $24.17 million. In contrast, BlackRock’s ETHA attracted over $670 million during the same period. Grayscale’s regulatory advantage stems from its ETF registration under the Securities Act of 1933 rather than the Investment Company Act of 1940. This structural difference allows functional modifications, including staking implementation, without requiring additional SEC approvals through standard disclosure reviews. Competitors like BlackRock and Fidelity, operating under the 1940 Act, face comprehensive approval processes for staking mechanisms, resulting in repeated SEC deferrals. Last month, Grayscale shareholders overwhelmingly approved three trust agreement amendments authorizing Ethereum staking, permitting additional staking fees, and granting modification rights under specific conditions. The staking authorization proposal received 99.75% shareholder support. The SEC’s recent adoption of universal listing standards for crypto ETPs in September enables exchanges like NYSE Arca to self-approve new products and functional adjustments meeting basic criteria for liquidity, transparency, and compliance disclosure. Following this rule implementation, Grayscale withdrew its staking amendment application on September 29, securing SEC approval for its Ethereum ETFs to operate under NYSE Arca’s Rule 8.201-E universal listing framework. Capitalizing on regulatory flexibility, Grayscale has established early market leadership in staking-enabled spot crypto ETFs. As SEC policies continue evolving, multiple issuers are accelerating staking integration efforts. 21Shares recently announced staking for its Ethereum ETF with one-year sponsor fee waivers, while Bitwise set its Solana staking ETF fee at 0.20%, below market expectations. However, the ongoing U.S. government shutdown, which has reduced SEC operations to essential personnel only, may temporarily delay approval processes for other ETF staking functionalities in the near term.