BlackRock Plans Staking for ETHA ETF

BlackRock aims to enhance its iShares Ethereum Trust (ETHA) by incorporating staking, as seen in a filing with the U.S. Securities and Exchange Commission (SEC) on Thursday. This initiative follows the SEC's recent approval of the REX-Osprey Solana Staking ETF, marking the first ever staking crypto exchange-traded product this month. The filing was made by Nasdaq under SEC Rule 19b-4, a guideline for exchanges wishing to list funds. Competing asset managers, such as 21 Shares and Grayscale, have also proposed updates to their Ethereum funds. This announcement arrives on the heels of Ethereum ETFs experiencing their highest daily net inflow, with a total of $726.74 million reported on Wednesday. Notably, BlackRock's ETHA attracted $499 million, alongside positive inflows across eight of nine Ethereum funds, according to SoSoValue data. In July alone, ETH ETFs have accumulated net inflows of $2.27 billion, the most significant monthly influx since their inception. Approved alongside several other spot ETH ETFs in July 2024, BlackRock's Ethereum Trust has become the largest Ethereum ETF, boasting over $7.9 billion in assets as of July 17. Robert Mitchnick, BlackRock's Head of Digital Assets, has suggested that the SEC is poised to approve staking for ETH ETFs as a next step. Bloomberg ETF Analyst James Seyffart stated, “Staking is ongoing.” Several ETH staking ETF proposals are already under consideration, with final deadlines for earlier submissions set for late October. The BlackRock filing, however, has a deadline extending until approximately April 2026, though approval may occur by late 2025. Nasdaq proposes to stake “all or a portion” of the trust’s ETH via trusted providers, ensuring they won’t pool trust-held ether with assets from other entities or take on risk from slashing or forks. Coinbase is expected to serve as the custodian and primary execution agent for BlackRock's product, likely acting as a staking partner. “Staking the trust's ether would yield benefits for investors and enhance the tracking of returns from ether holdings. This improvement would facilitate the creation and redemption processes for authorized participants, thus benefiting end investors,” asserted Nasdaq Senior Counsel Sun Kim. Earlier this month, the SEC approved the REX-Osprey Solana Staking ETF, establishing a new precedent under the Securities Exchange Act of 1940, differing from the 1934 Act tied to SEC Rule 19b-4. To date, no staking fund has received approval under the 1934 rule, although the SEC has expressed interest in more staking products, noting that most staking activities are likely exempt from securities laws. Additionally, issuers are exploring opportunities to list staking funds for alternative assets like Cronos and Tron. Recently, Canary Capital proposed a staking fund that would track Injective. ETH has been among the top performers in the current crypto market upswing, currently trading at around $3,399, approaching its all-time high of $4,878 reached in 2021, according to The Block's data. Disclaimer: The Block operates independently as a media outlet delivering news and research. As of November 2023, Foresight Ventures is a significant investor in The Block, which continues to provide objective and timely information about the crypto sector. This article serves purely informational purposes and is not legal, tax, investment, financial, or other advice.