BlackRock’s Staking Proposal for Ethereum ETF

BlackRock aims to include staking in its spot Ethereum exchange-traded fund (ETF), following a rules change request submitted to the U.S. Securities and Exchange Commission (SEC) by Nasdaq, where the fund is listed.

The addition of staking functionality to the iShares Ethereum Trust (ETHA) would enable it to earn yield by using held ETH to validate transactions on the Ethereum blockchain, according to the 19b-4 proposal.

Various issuers, including Fidelity, Grayscale, and 21Shares, are also pursuing staking inclusion in their funds. The SEC is expected to make decisions in October regarding similar applications from Cboe and the NYSE. Although the SEC has an April deadline to evaluate ETHA, Bloomberg analyst James Seyffart mentioned in an X post that he doesn’t believe it will take that long for potential approval.

Seyffart noted, “We think staking will likely be approved by at least 4Q25.”

> Staking is not “done.” There are plenty of ETH staking ETF filings already on the books… but we think staking will likely be approved by at least 4Q25
> — James Seyffart (@JSeyff) July 17, 2025

While proponents of staking claim that it will enhance returns, critics raise issues regarding security vulnerabilities and market manipulation.

Currently, the prospectuses for ETHA and eight other Ethereum funds indicate that these products would not include staking. However, the 19b-4 filing proposes to remove that clause and introduce new language that permits it.

The proposal states, “In consideration for any staking activity in which the Trust may engage, the Trust would receive all or a portion of the staking rewards generated by the staking provider, which may be treated as income to the Trust.”

BlackRock’s Ethereum fund has been the most successful in this sector, generating over $7 billion in net inflows—more than double any other fund, per UK asset manager Farside Investors. As of Thursday’s close, it was trading just below $26, up nearly 1%.

Ethereum ETFs have experienced a surge in recent weeks, with more than $2.2 billion in net investments over a nine-day period. They also reached a record daily high on Wednesday, with $726.6 million in inflows, including almost $500 million from ETHA alone.