Grayscale Says Investors Are Leaving ‘Money on the Table’ in Unstaked ETH ETFs

Steve argues that investors in unstaked ether products are leaving staking rewards on the table. He says most assets remain in unstaked products, even though staking is Ethereum’s natural on-chain state. In his framing, holding ETH in an ETF without staking it is an active decision to forgo those rewards, rather than a neutral default.

Grayscale says it typically stakes about 80% of its portfolio and that staking contributed about 100 basis points of outperformance versus its peer set in the product’s first year. Steve also says Grayscale’s returns over the past year compare favorably with those of funds that entered later and may be smaller. These are Grayscale’s reported results, not a guarantee that staking will produce the same advantage in future periods.

For investors comparing staking ETFs, Steve says the headline management fee is only one part of the comparison. They should also examine what share of staking rewards the manager keeps, how much of the portfolio is actually staked given liquidity needs, and how many rewards the program realizes. Grayscale says it has the lowest management fee, and points to its first-mover experience, scale, and validator diversification as additional benefits.

A staking queue can delay when new investments begin earning rewards, Steve says. He argues that a larger product with a longer track record can avoid having returns diluted by investors who are waiting to enter the queue. That makes the timing and scale of a fund’s staking activity relevant alongside its stated staking level: assets held in the product do not necessarily start generating rewards immediately.

Staking also brings some illiquidity, which investors should weigh against the potential rewards. Steve says they should understand how each program operates and which partners it uses. Grayscale says its size, experience, and diversification across validators help it manage liquidity risk; those features do not remove the need to consider how a staking program works.

Steve expects broader adoption of the Ethereum chain to support new products and says staking will become increasingly important to Ethereum ETFs. His central case is that investors assessing these products should look beyond whether an ETF offers staking and compare how much it stakes, what rewards it passes through, and how it handles queues and liquidity.