BlackRock today launched the iShares Staked Ethereum Trust (ETHB) ETF, listed on Nasdaq. While it might appear to be just another standard cryptocurrency ETF, this one stands out by offering investors combined exposure to the spot price of Ethereum and staking rewards. The fund comes amid growing demand for yield in cryptocurrency funds and expands BlackRock’s digital asset portfolio alongside its previous iShares Ethereum Trust (ETHA), launched in July 2024, which offers price-only exposure.
Product Mechanics and Performance Profile
ETHB is structured to allow investors to stake a significant portion of their Ethereum holdings (BlackRock anticipates staking between 70% and 95%) to capture income from the Ethereum proof-of-stake network, while maintaining daily trading liquidity through its Nasdaq-listed shares. BlackRock projects an estimated annual return of between 3.5% and 4.2% APR through 2026, with additional upside potential thanks to maximum extractable value (MEV) rewards, according to the issuer.
“Investors are increasingly investing in digital assets as part of their strategic portfolio construction, and ETHB offers convenient and transparent access to income and exposure to the asset,” said Jessica Tan, Head of Global Product Solutions for the Americas at BlackRock.
Fees, Revenue Sharing, and Liquidity Restrictions
Regarding fees, BlackRock receives 0.25% annually on net asset value (NAV), with a first-year waiver that reduces the fee to 0.12% on the initial $2.5 billion in assets under management, the company reported.
On the other hand, BlackRock and its execution agent, Coinbase, will retain 18% of the ETF’s gross staking revenue, directly reducing the net return distributed to shareholders.
While the ETF shares are traded daily, the underlying staked Ether is subject to Ethereum’s activation, exit, and withdrawal mechanisms. Stakeholder ETH and withdrawals can be illiquid during staking or exit windows, and activation/exit queues can extend for days, weeks, or even months.
Compared to ETHA, the iShares Ethereum Trust ETF, which only offered price exposure, this new product explicitly integrates staking operations and their corresponding operational and liquidity considerations. The product aims to reduce technical and custody barriers for institutional investors by centralizing validator operations and security on BlackRock’s infrastructure.
This new ETF offers another attractive option for institutional investors seeking cryptocurrency exposure through traditional, regulated products. With the inclusion of staking, the ETF’s annual returns are expected to be higher than they would be if it only had exposure to the price of ETH.
Clearly, the institutional investment boom in the crypto market has only just begun, and we will undoubtedly see more financial products like this from major companies such as BlackRock.
