Following the launch of the first wave of no-stakes cash (ETH) exchange-traded funds, BlackRock’s iShares Staked Ethereum Trust ETF (ETHB), one of the most anticipated releases in the industry, begins trading on Nasdaq on Thursday.
The fund is the asset manager’s third crypto ETF and BlackRock’s first to integrate staking. ETHB will hold spot ether and stake a portion of these holdings on the Ethereum network, allowing investors to potentially earn rewards while benefiting from price movements.
The new vehicle expands BlackRock’s existing digital asset portfolio, which includes the iShares Bitcoin Trust (IBIT) and the iShares Ethereum Trust (ETHA). These funds have grown rapidly since their launch, with IBIT now managing over $55 billion in assets and ETHA around $6.5 billion.
“It’s really about choice for investors,” Jay Jacobs, BlackRock’s U.S. head of equity ETFs, told CoinDesk in an interview. “While ETHA has developed liquidity and a growing derivatives market, some investors are focused on maximizing total returns by combining ether price exposure with staking rewards, he added.”
Ethereum uses a proof-of-stake system that allows holders of its native token to lock coins to facilitate transaction validation and secure the network. In return, participants receive rewards, which many investors view as a return-on-asset type feature.
Until now, most ether ETFs have only offered price exposure without staking, although some asset managers, including Grayscale, have recently launched ETFs with staking capabilities. Jacobs said this discrepancy may have discouraged some crypto-native investors from moving their assets to exchange-traded funds.
“Some investors who already held ether directly were staking it and weren’t ready to jump into an exchange-traded product because they would lose that functionality,” he said. “By integrating staking, the ETF allows investors to retain the benefits of staking while enjoying the operational benefits of an ETF structure.”
These benefits include institutional-grade custody, the ability to trade through traditional brokerage accounts, and integration with standard portfolio allocations alongside stocks and bonds.
The product may also appeal to certain institutional investors who favor assets that generate income or cash flow.
“For some institutions, when they evaluate an investment, they want to think about it from a cash flow perspective,” Jacobs said. Staking rewards can help make ether more comparable to other assets in wallet models.
Read more: Crypto ETFs with staking can boost returns, but they may not be right for everyone
BlackRock expects interest in the product to come from a wide range of investors, including individual traders, financial advisors and institutional allocators such as hedge funds and family offices.
The fund has a sponsor fee of 0.25%, although BlackRock waives part of the cost for the first year, reducing it to 0.12% on the first $2.5 billion in assets. Jacobs said the temporary discount is intended to help the product gain traction in its first few months.
Despite the growth of crypto investment products, allocations to digital assets remain relatively low in traditional portfolios. Institutions typically allocate allocations in the low single digits, often around 1 to 2 percent, according to Jacobs. At these levels, he said, the risk contribution of Bitcoin or other digital assets can be comparable to the exposure investors already accept from big tech stocks within diversified portfolios.
BlackRock has quickly become one of the largest players in crypto investment products. The company oversees approximately $130 billion in crypto-related exchange-traded products, tokenized liquidity funds, and stablecoin reserve management. According to the company, iShares captured approximately 95% of flows into digital asset ETPs in 2025.
For now, Jacobs said the company remains focused on expanding adoption of its existing crypto products, particularly bitcoin and ether, as many investors are still learning about this asset class.
“We are still in the early days of adopting digital asset ETFs,” he said. “For many investors, this is the first step.”
