BlackRock Files Staked Ethereum ETF, Hinting at Explosive Yield Potential

• BlackRock files staked Ethereum ETF registration in Delaware, marking intention beyond its current $13.5 trillion asset base.
• The ETF is holding $11.5 billion as of November 17th, even after experiencing $165 million of outflows.
• Annual yields for Staked ETH ETFs could potentially reach 3.95%, achieved through both price appreciation and staking rewards.

BlackRock has registered a new staked Ethereum exchange-traded fund (ETF) in Delaware, marking its intention to go beyond its flagship Ethereum ETF offering. The move indicates growing interest from the $13.5 trillion asset manager in products offering staking rewards to investors seeking income.

A Delaware name registration is the initial step for all issuers of funds intending to introduce a new ETF to the market. BlackRock also files additional documentation for approval to move forward. This is the first indication that such a staked ETH offering may launch soon.

The new ETF will operate side by side with BlackRock’s iShares Ethereum Trust ETF (ETHA), which received $13.1 billion in net inflows since July 2024. As of now, ETHA does not stake its ether because of operational and regulatory complexities but is planning to do so via an SEC filing regarding a staking update.

Regulatory Support and Industry Context

Under the Trump administration, the U.S. Securities and Exchange Commission (SEC) adopted a more permissive approach for crypto ETFs. A generic standard for listing makes approval faster instead of having to deal with one-off cases. There are around 70 products awaiting approval following government shutdown delays.

BlackRock’s staked ETH ETF is registered under the 1933 act for investor protection and full disclosure before being resold to the general public. It is to be noted that BlackRock’s first iShares Ethereum fund was also filed by Schweiger late last year 2023 itself.

Nasdaq filed a proposal for a rule change in July to include staking for ETHA. Other ETF managers, such as 21 Shares and Grayscale, have proposed changes to Ethereum ETFs too. Still, ETHA is still the largest Ethereum ETF as of November 17th, holding $11.5 billion worth of assets despite having $165 million worth of outflows recently.

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Potential Returns from Staked Ethereum ETFs

Staked ETH ETFs may potentially generate higher yields by offering both price exposure and staking rewards to create total return products. Yield-driven investors may also find staked Ethereum products attractive because staking yields around 3.95% annual returns on average, according to Blocknative data.

Grayscale and REX-Osprey have already rolled out staked Ethereum ETFs in the past few months. Additionally, REX-Osprey provides staking Solana ETF products for clients to enjoy higher yields on their investments. Robert Mitchnick, the BlackRock digital assets chief, expects SEC regulation approval for staking Ethereum products as “the next phase” of ETF development.

BlackRock is also selective in its crypto ETF products. Unlike other players that have filed altcoin ETF products, BlackRock just filed its Bitcoin Premium Income ETF, which produces income through covered call options. This is indicative of BlackRock’s selectiveness associated with Ethereum and Bitcoin rather than altcoins.

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