ETF for crypto staking in grayscale fields

While Grayscale waits for an SEC decision on its spot Ethereum ETF application, it is providing an investment vehicle that is concentrated on particular proof-of-stake network tokens.

Madilyn Swift

March 06, 2024

2Min Reads

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Crypto

A division of the company that created the largest spot Bitcoin (BTC) exchange-traded fund (ETF), Grayscale Advisors LLC unveiled its newest offering to profit from staking rewards in the midst of a surge in the cryptocurrency market and rising staking ratios on blockchains such as Ethereum (ETH).

Proof-of-stake (PoS) native token investments are made by the Grayscale Dynamic Income Fund (GDIF), which generates income and distributes it to investors on a quarterly basis.

PoS blockchains have a feature called staking that lets users validate transactions and secure decentralised networks by temporarily locking up cryptocurrency. Users frequently receive incentives for their staked currency, which are usually native tokens that were initially staked.

The biggest PoS network that allows staking is Ethereum. Over $115 billion in staked Ether, or more over 25% of the platform's ETH circulation quantity, is reportedly locked on its beacon chain, according to crypto.news.

The nine PoS staking assets that the GDIF will invest in are Aptos (APT), Celestia (TIA), Coinbase Staked Ethereum (CBETH), Near (NEAR), Osmosis (OSMO), Polkadot (DOT), Sei (SEI), and Solana (SOL). The GDIF will not directly invest in Ethereum staking.

Amidst industry scrutiny, Grayscale initiates staking.
Grayscale's move to establish a staking-focused fund coincides with the ongoing scrutiny of cryptocurrency operations by US authorities via several organisations, including the Securities and Exchange Commission (SEC).

The U.S. SEC and other governments have cracked down on the function, citing investor protection and securities laws, despite the fact that 55% of cryptocurrency users in Singapore have staked their investments. Companies like Kraken were hit with penalties and had to stop offering their cryptocurrency staking services to US investors.

Data, however, indicates that this pattern hasn't had much of an impact on Ethereum supporters, especially while the number of ETH staking transactions keeps rising. Additionally, rather than banning the staking market, U.K. officials are determined to regulate it.