BlackRock's Staking Ethereum ETF Struggles to Gain Traction

The introduction of staking Ethereum exchange-traded funds (ETFs) was expected to strengthen their appeal, but BlackRock's results show investors still prefer its original ETHA fund.

When US spot Ethereum ETFs launched in July 2024, critics argued that the absence of staking was a significant drawback. Investors who bought these funds gained exposure to ETH's price but missed out on rewards available to holders who committed their tokens to securing the network.

The iShares Staked Ethereum Trust ETF (ETHB) stakes part of its holdings and distributes some of the resulting income to shareholders, while the iShares Ethereum Trust ETF (ETHA) provides straightforward exposure to ether without staking. Despite offering yield, ETHB still lags behind ETHA in terms of assets under management.

As of September 11, ETHA held around $8.96 billion in net assets compared to roughly $1.05 billion for ETHB, according to BlackRock fund data. The secondary market trading also shows a significant difference, with ETHA generating an estimated $1.86 billion in share turnover compared to ETHB's $61.8 million.