On 1 June 2025, the U.S. Securities and Exchange Commission (SEC) will rule on a landmark proposal which has captured the full attention of the Web3 industry - Grayscale’s proposal to allow staking in its Ethereum Exchange Traded Funds (ETFs).
A positive ruling could set a precedent for cryptocurrency staking in regulated financial markets, opening the door for institutional adoption and deeper integration of crypto into traditional finance.
Here is everything you need to know about the Ethereum ETF staking proposal, and what a positive ruling could mean for the future of crypto staking.
Founded in 2013, Grayscale has grown into one of the largest digital asset investment firms in the world. Known for issuing both the Grayscale Bitcoin Trust (GBTC) and now the Grayscale Ethereum Trust ETF, the company has been pivotal in bridging the gap between cryptocurrencies and traditional finance.
On 14 February 2025, the New York Stock Exchange (NYSE) Arca filed a proposal to the SEC to allow the Grayscale Ethereum Trust ETF to stake their ETH holdings through trusted providers, earning rewards as income while maintaining the current custody arrangement.
If the SEC approves the Grayscale ETF staking proposal, it could open the doors for other ETF issuers looking to integrate staking rewards from not only Ethereum but potentially other proof-of-stake cryptocurrencies as well.
The implications for infrastructure are significant too. A positive ruling could result in higher demand for:
high-performance validator infrastructure
compliant staking nodes on secure hosting environments
scalable, enterprise-grade infrastructure
In the crypto space, ‘staking’ is the process by which the holder of a token locks up their assets to ‘secure the network’ in exchange for rewards. This enables network operations such as validating transactions. While it might be straightforward from a user point of view, integrating staking into investment vehicles like ETFs poses regulatory challenges.
Under Gary Gensler, the SEC had expressed concerns that staking services may resemble unregistered securities offerings. There were also questions about how to categorize staking rewards – whether as dividends, rental income, or some other type of yield.
Time will tell whether the new chairman of the SEC, Paul Atkins, will share these concerns and what influence they will have on the SEC’s decision regarding Grayscale ETF staking.
A ruling in favor of Grayscale’s proposal could have widespread implications:
Legitimization of staking in ETFs: approval could open the door for other ETF issuers to integrate staking, driving demand for Ethereum ETF staking and potentially other cryptocurrency ETF staking too
Institutional adoption: more financial firms may enter the crypto market through regulated ETFs
Increased crypto accessibility: investors could gain easier access to cryptocurrencies as the number of crypto-backed ETFs grow
As we outlined in our top Web3 trends and predictions for 2025 piece, cryptocurrency staking is already on the rise, and this momentum is unlikely to slow down. If the SEC approves Grayscale’s proposal, 2025 could be the year that crypto ETFs with staking rewards become a mainstream investment product, further integrating blockchain technology into traditional finance.
