Grayscale Mandates Quarterly Conversion of Staking Rewards into Cash

Grayscale has made significant changes to its crypto exchange-traded funds (ETFs) ETHE, GSOL, and GAVA. The company has amended its trust agreements to require a quarterly conversion of staking rewards into cash, which will then be distributed to shareholders.

The new rules apply to the Ethereum Staking ETF (ETHE), Solana Staking ETF (GSOL), and Avalanche Staking ETF (GAVA). ETHE currently holds $1.22 billion in assets, with 81.7% staked as ETH. GSOL has $101.16 million in assets, all of which are staked as SOL. GAVA has $4.27 million in assets, with 80.9% staked as AVAX.

The quarterly conversion will create a recurring market sell flow for reward tokens. However, this does not mean that the trusts' principal holdings of ETH, SOL, or AVAX will be sold. The distribution clauses only apply to staking consideration earned by the products.