Animal Spirits Podcast Talk Your Book: Staking Your Crypto For Yield
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Nov 24, 2025 Krista Lynch, Senior Vice President at Grayscale, dives into the intriguing world of crypto staking and ETFs. She clarifies how staking works and explains recent IRS guidance permitting ETF investors to earn rewards. Krista also discusses the implications for liquidity and potential risks involved in staking. With insights into Grayscale’s innovative multi-asset fund and the evolving ETF market, she highlights the growing interest from both retail and institutional investors. A fascinating look at the intersection of traditional finance and crypto!
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How Staking Generates Yield
- Staking lets token holders pledge assets to secure networks and earn native-token rewards like ETH or SOL.
- Krista Lynch says staking can generate meaningful yield (e.g., ~7% for Solana) for ETF investors.
Expect Staking Rewards As Distributions
- Expect ETFs that stake to distribute rewards as dividends rather than silently reinvesting them.
- Issuers will likely implement distributions after digesting the IRS guidance, Krista Lynch says.
Liquidity Tradeoffs When Assets Are Staked
- Staked assets become non-transferable, creating liquidity and redemption timing challenges for ETFs.
- Krista notes Ethereum unstaking can take up to ~40 days, conflicting with typical T+1/T+2 ETF redemptions.