BlackRock’s staking Ethereum ETF pays yield but investors still prefer its $9 billion ETHA fund

Staking was supposed to strengthen Ethereum exchange-traded funds (ETFs), but BlackRock’s early results show investors still favor its original fund.

When US spot Ethereum ETFs launched in July 2024, the absence of staking was widely identified as one of their biggest structural disadvantages. Investors buying the funds gained exposure to ETH's price but forfeited the rewards available to holders who committed their tokens to securing the Ethereum network.

At the time, JPMorgan cited the removal of staking from ETF filings as one reason it expected weaker demand than for Bitcoin funds. BitMEX Research similarly argued that institutional investors could find non-staking products less attractive, while Galaxy Digital estimated that giving up staking represented a meaningful opportunity cost for ETF investors.

BlackRock now offers an early test of that argument.

Its iShares Ethereum Trust ETF (ETHA) provides straightforward exposure to ether without staking. The newer iShares Staked Ethereum Trust ETF (ETHB) stakes part of its holdings and distributes a portion of the resulting income to shareholders.

So far, adding yield has not overturned the hierarchy.

ETHA held about $8.96 billion in net assets on Sept. 11, compared with roughly $1.05 billion for ETHB, BlackRock fund data show.