BlackRock is set to launch its iShares Staked Ethereum Trust on Nasdaq under the ticker ETHB, with plans to distribute 82% of its staking rewards to investors through monthly payouts. This launch positions ETHB as the third U.S. Ethereum staking product, following competitors Grayscale and REX-Osprey, which entered the market earlier.
The fund, which aims to stake 70-95% of its Ethereum holdings, will retain the remaining 18% of rewards to cover custodial and service provider fees. This product joins BlackRock’s digital assets exchange-traded product lineup, including the iShares Bitcoin Trust (IBIT) and the iShares Ethereum Trust (ETHA).
BlackRock’s U.S. Head of Equity, Jay Jacobs, indicated that a notable migration of funds from the existing ETHA to the new ETHB is anticipated. With ETHA’s substantial liquidity and a robust options market—boasting $6.5 billion in assets—Jacobs believes it presents a strong alternative for those looking to stake Ethereum. He expects that a majority of Ethereum investors will find staking appealing, thereby increasing interest in ETHB.
In a bid to attract those who currently own Ethereum outright, Jacobs noted that the new trust’s staking feature aligns more closely with what these investors might expect if they were staking their funds directly.
For custodianship, BlackRock has chosen Coinbase and Anchorage Digital, with Coinbase set to earn a base staking fee of 10% from the rewards—though this could decrease to 6% if the fund achieves $20 billion in assets under management. The fund has also approved several validators, including Figment Inc. and Galaxy Blockchain Infrastructure LLC, to facilitate the staking process.
Grayscale stands as BlackRock’s main competitor, offering its own Ethereum staking products—the Grayscale Ethereum Staking ETF and the Grayscale Ethereum Mini Trust. Grayscale’s Mini Trust reportedly passes along 94% of staking rewards, while the ETHE fund distributes 77%. However, Grayscale’s ETHE management fee is significantly higher at 2.5%, while BlackRock’s ETF will charge a competitive 0.25% after an initial period of 0.12%.
Meanwhile, the REX-Osprey ETH + Staking ETF, which debuted in September, has also carved out a niche in the market, utilizing a fund-of-funds strategy and charging a 0.75% management fee while passing 100% of staking rewards to its investors.
With the increasing diversity of Ethereum staking products, BlackRock’s entrance into this competitive landscape is poised to attract new investors and reshuffle existing investments within the Ethereum ecosystem.
