Staking ETPs: Distribution, Accumulation and the Tax Question in Germany

If you hold Ethereum, there are two ways to collect the staking yield: yourself, with your own wallet and your own access to a validator, or through an exchange-traded product. The second route is currently being widened. In the United States, Fidelity has filed to stake the ether in its fund and pay the proceeds out quarterly in cash. In Europe, staking ETPs have existed for longer, but most of them keep the yield inside the product.

That raises a question with concrete consequences for you as an investor in Germany: does the staking yield land as a payment in your settlement account, or does it grow quietly inside the price of the product? The answer determines when a taxable inflow arises and how much of the gross yield reaches you. Holding ETH through a security on Xetra is a different construction for tax purposes than holding the same quantity in your own wallet and generating rewards there.

What a staking ETP is and how it differs from staking with your own wallet

An ETP, or exchange traded product, is an exchange-tradable security that tracks the price of an underlying asset. With crypto ETPs that underlying is a cryptocurrency, which the issuer normally backs physically. You buy the paper through your ordinary securities account; no wallet or exchange account is required.

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