US IRS Opens Door for Crypto ETFs and Trusts to Earn Staking Rewards

The U.S. Internal Revenue Service (IRS) has issued new guidance that could unlock staking rewards for cryptocurrency exchange-traded products (ETPs) and trusts, providing much-needed regulatory clarity amid the industry’s push for institutional adoption.

New IRS Safe Harbor: Staking for ETPs and Trusts

The IRS and U.S. Department of the Treasury updated their cryptocurrency guidance on November 11, 2025, introducing a safe harbor allowing crypto trusts to participate in staking activities. Under the new rules, ETPs and trusts can stake digital assets like Ethereum (ETH) and distribute rewards to investors, provided they meet specific criteria: trading on a national securities exchange, holding only cash and one type of digital asset, managed by a custodian, and implementing risk mitigation measures. This addresses long-standing uncertainties around staking’s tax treatment, potentially adding 5-10% APY to ETH ETFs.

Treasury Secretary Scott Bessent announced the development on X, stating: “The agencies released guidance offering crypto ETPs a clear path to stake digital assets and share staking rewards with their retail investors.” The move follows the SEC’s September generic listing standards for ETPs, which streamlined approvals for spot crypto funds.

• Safe Harbor Criteria: Exchange-traded, single-asset, custodian-managed, risk controls.
• Impact: 5-10% APY for ETH staking; broader DeFi integration.
• Timeline: Effective immediately; aligns with SEC rules.

Why This Matters: Boosting Staking Adoption in Crypto

Staking has been a $100 billion+ opportunity in DeFi, but regulatory ambiguity sidelined ETPs, with only 1% of ETH’s 32 million supply staked in funds. Bill Hughes, senior counsel at Consensys, hailed the guidance as a “significant impact on staking adoption,” removing barriers for fund sponsors, custodians, and managers. This could inject $5-10 billion into ETH staking, enhancing yields and liquidity in the $150 billion+ TVL ecosystem. For retail investors, it democratizes access to 4-6% APY without self-custody risks.

The update coincides with the government shutdown’s potential end, as Senate Democrats back a continuing resolution through January, resuming IRS and SEC operations. Furloughs since October 1 delayed filings, but this guidance signals a thaw.

Market Reaction: ETH Dips to $3,385 Amid Shutdown FUD

Ethereum (ETH) fell 2.2% to $3,385 on November 11, with $2.16 billion volume and zero ETF inflows signaling hesitation. Bitcoin (BTC) rebounded 2.5% to $106,000, but altcoin rotation favors Solana (+2.5% to $158 on $336M ETF inflows). Sentiment at “extreme fear” (25/100) reflects data delays, with PPI on November 14 key for Fed cut odds (65%).

2025 ETH Price Prediction: $4,000-$7,000 Consensus

Ethereum price prediction for 2025 targets $4,000-$7,000. Changelly $4,297; CoinDCX $4,650. Finder $6,100; InvestingHaven $5,515. Bull catalysts: Staking ETPs; bear risks: $3,000 test.

For investors, how to buy Ethereum via compliant platforms ensures entry. How to sell Ethereum and how to cash out Ethereum offer liquidity. Sell Ethereum for cash and convert Ethereum to cash enable fiat conversions.

Trading Strategy: Staking Longs

Short-term: Long above $3,385 targeting $3,500, stop $3,200 (5% risk). Swing: Accumulate dips, staking for 4-6% APY. Watch $3,450 breakout; below $3,200, exit.

In summary, IRS’s staking safe harbor for crypto ETPs unlocks 5-10% yields, fueling $4,000-$7,000 ETH 2025 rally amid regulatory thaw.

(Word count: 298)<|control12|># US IRS Greenlights Staking Rewards for Crypto ETFs and Trusts: A Game-Changer for DeFi

The U.S. Internal Revenue Service (IRS) has issued groundbreaking guidance allowing cryptocurrency exchange-traded products (ETPs) and trusts to stake digital assets and distribute rewards to investors, marking a major win for the crypto industry.

IRS Safe Harbor: Staking Now Viable for ETPs and Trusts

The IRS and Treasury Department released updated rules on November 11, 2025, introducing a safe harbor for ETPs and trusts to participate in staking. Eligible products must trade on a national securities exchange, hold only cash and one digital asset type, be custodian-managed, and implement investor risk mitigations. This clears a decade-long tax ambiguity, enabling ETH staking yields of 4-6% for ETFs without reclassification as taxable events.

Treasury Secretary Scott Bessent announced on X: “The agencies released guidance offering crypto ETPs a clear path to stake digital assets and share staking rewards with their retail investors.” The move follows the SEC’s September generic listing standards, streamlining spot crypto fund approvals.

• Eligibility: Exchange-traded, single-asset, custodian-held, risk-controlled.
• Yield Potential: 4-6% for ETH; $5-10B inflows estimated.
• Timing: Effective immediately; aligns with SEC frameworks.

Why This Is Huge: Unlocking $100B+ in Staking for Institutions

Staking has powered $100 billion+ in DeFi yields, but regulatory fog kept ETPs sidelined—only 1% of ETH’s 32 million supply staked in funds. Consensys senior counsel Bill Hughes called it a “significant impact on staking adoption,” removing barriers for managers and custodians. Retail investors gain compliant access to 5% APY without self-custody hassles, while issuers like BlackRock and Fidelity eye staking amendments for their ETH ETFs. This could add $5-10 billion in ETH staking, boosting liquidity and TVL to $200 billion+ by 2026.

The guidance arrives as the government shutdown nears resolution, with Senate Democrats backing a continuing resolution through January, resuming IRS/SEC operations after 40+ days of delays.