The SEC has delayed its decision on Ether staking for Grayscale's Ethereum Trust ETF and Ethereum Mini Trust ETF until June 1, 2025, with a final ruling expected by the end of October 2025.

The SEC's cautious regulatory approach towards crypto ETF innovations is evident, as seen in similar proposals from other asset managers.

The SEC's extension of the review period for these proposals aims to provide adequate time for thorough consideration of the proposed rule changes.

Staking would enable the ETFs to earn rewards by participating in Ethereum's proof-of-stake consensus mechanism, which has not yet been approved for any U.S. spot crypto ETF.

Current staking yields for Ether range from 2.4% on Coinbase to between 2% and 7% on Kraken, indicating potential earnings for investors.

This decision involves allowing Ether ETF investors to stake their holdings for yields, a feature that could enhance the appeal of these ETFs.

This underperformance is notable, especially as other digital assets like XRP and Solana have experienced stronger gains during the current bull market.

The SEC's crypto task force is actively reviewing long-term regulatory strategies for digital assets and engaging with industry stakeholders for insights.

This postponement follows the SEC's earlier concerns regarding In-Kind creations, which were previously opposed due to issues related to taxable events and liquidity.

Grayscale proposes that staking be conducted solely by the sponsor, ensuring no commingling of funds, with Coinbase Custody safeguarding the ETH assets.

Since their launch in 2024, Ether ETFs have attracted only $2.28 billion in net inflows, a stark contrast to Bitcoin ETFs that have garnered over $35.4 billion.

As of mid-April 2025, Ether's market performance has been lackluster, trading below $2,000, significantly lower than its 52-week high of $4,112 and all-time high of $4,866.