Following the first wave of spot ether (ETH) exchange-traded funds launched without staking, BlackRock’s iShares Staked Ethereum Trust ETF (ETHB), one of the industry’s most anticipated releases, begins trading on Nasdaq on Thursday.
The fund is the asset manager’s third crypto ETF and BlackRock’s first to incorporate staking. ETHB will hold ether in spot and stake a portion of those holdings on the Ethereum network, allowing investors to potentially earn rewards while profiting from price movements.
The new vehicle expands BlackRock’s existing line of digital assets, which includes iShares Bitcoin Trust (IBIT) and iShares Ethereum Trust (ETHA). Those funds have grown rapidly since their launch: IBIT today manages more than $55 billion in assets and ETHA around $6.5 billion.
“It’s really a matter of investor choice,” Jay Jacobs, head of U.S. equity ETFs at BlackRock, 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 help validate transactions and secure the network. In return, participants receive rewards, which many investors view as a performance-like characteristic of the asset.
Until now, most ether ETFs have offered only non-staking price exposure, although some asset managers, including Grayscale, have recently launched ETFs with staking capabilities. Jacobs said that gap may have deterred some crypto-native investors from moving assets into exchange-traded funds.
“Some investors who already own ether directly were staking it and weren’t ready to move to an exchange-traded product because they would lose that feature,” he said. “By incorporating staking, the ETF allows investors to retain the benefits of staking while gaining the operational advantages of an ETF structure.”
Those advantages include institutional-grade custody, the ability to trade through traditional brokerage accounts, and integration with standard portfolio allocations along with stocks and bonds.
The product may also appeal to certain institutional investors who prefer assets that generate income or cash flow.
“Some institutions, when they evaluate an investment, want to think about it from a cash flow perspective,” Jacobs said. Staking rewards can help make ether more comparable to other assets in portfolio models.
Read more: Shared crypto ETFs can boost returns, but they may not be 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 carries a sponsor fee of 0.25%, although BlackRock is waiving some 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 small in traditional portfolios. According to Jacobs, institutions typically make allocations in the low single digits, often between 1% and 2%. At those levels, he said, the risk contribution of bitcoin or other digital assets may be comparable to the exposure investors already accept from large tech stocks within diversified portfolios.
BlackRock has quickly become one of the largest players in cryptocurrency investment products. The firm oversees approximately $130 billion in cryptocurrency-related exchange-traded products, tokenized liquidity pools, and stablecoin reserve management. According to the company, iShares captured around 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 the asset class.
“We are still in the early days of digital asset ETF adoption,” he said. “For many investors, this is the first step.”
