BlackRock Launches Staked Ethereum Trust, Bringing On-Chain Yield to Wall Street

BlackRock is now staking Ethereum on behalf of mainstream investors.

A staked ether product for brokerage accounts

On March 12, the $14 trillion asset manager launched the iShares Staked Ethereum Trust (trading on Nasdaq under the ticker ETHB). The fund holds ether, the native token of the Ethereum network, and stakes most of it on-chain through Coinbase Prime, passing a portion of the resulting rewards to shareholders after fees.

The product is the first from a major U.S. issuer to combine spot Ethereum exposure with staking income inside a regulated, exchange-traded vehicle—another step in Wall Street’s effort to package digital assets for brokerage and retirement accounts.

BlackRock says the trust seeks “to reflect generally the performance of the price of ether and rewards from staking a portion of the Trust’s ether, less the Trust’s expenses and other liabilities.” It is organized as a Delaware statutory trust and registered via a securities offering statement rather than the Investment Company Act of 1940, meaning it is not a mutual fund or a traditional ETF even though it trades like one.

How ETHB stakes, and where assets are held

Under normal market conditions, the sponsor says it intends to stake 70% to 95% of the trust’s ether, keeping a 5% to 30% liquidity sleeve unstaked to handle creations, redemptions and network delays.

The underlying ether is held in custody accounts at Coinbase Custody Trust Company, with Anchorage Digital Bank serving as an additional custodian.

Staking is the process by which Ethereum validators lock up coins to help secure the network and validate transactions, generating protocol-level rewards. For ETHB, BlackRock and Coinbase retain 18% of gross staking rewards as compensation, with the remaining 82% accruing to the trust and ultimately investors.

The trust also charges a 0.25% annual sponsor fee, with a 12-month waiver lowering the fee to 0.12% on the first $2.5 billion of assets starting from launch.

Distributions, fees, and share backing

ETHB distributes staking income in cash, with the sponsor indicating monthly distributions as a target. To pay the sponsor fee and any expenses not covered by the sponsor, the trust periodically sells small amounts of ether. As a result, the amount of ether backing each share is expected to decline over time unless offset by price gains and staking rewards.

Jessica Tan, head of Americas for global product solutions at BlackRock, said in a launch statement that ETHB “provides access to income and exposure to the asset in a convenient, transparent way.” Robert Mitchnick, BlackRock’s global head of digital assets, described Ethereum as the “world’s second-largest digital asset” and said the new trust “brings together spot ether exposure and staking rewards in an ETP.”

Tax treatment: grantor trust structure

For U.S. tax purposes, BlackRock says it intends ETHB to qualify as a grantor trust, meaning each shareholder is treated as directly owning a pro rata share of the trust’s ether and staking income.

The prospectus states that staking consideration is expected to be treated as taxable income to investors under Internal Revenue Service guidance issued in 2025 on digital-asset staking. When the trust sells ether to pay fees or expenses, those sales are treated as if shareholders sold their share of that ether, potentially triggering capital gains or losses.

A bigger push into crypto—and deeper ties to Coinbase

ETHB extends BlackRock’s push into digital assets that began with the iShares Bitcoin Trust (IBIT), launched in January 2024. As of early March, BlackRock reported more than $55 billion in IBIT and about $6.5 billion in its plain spot Ethereum trust, ETHA, which does not stake its holdings.

The product also deepens BlackRock’s relationship with Coinbase, which already serves as custodian and prime execution agent for IBIT and ETHA and is now central to ETHB’s staking operations. Coinbase is one of the largest Ethereum staking providers globally.

Regulatory sensitivity around staking

The partnership comes amid ongoing regulatory scrutiny. In June 2023, the Securities and Exchange Commission sued Coinbase, alleging, among other things, that its retail staking-as-a-service program involved the offer and sale of unregistered securities. The SEC also reached a separate settlement with Kraken earlier that year over its staking program.

Meanwhile, the SEC approved the first spot bitcoin ETFs in January 2024 and spot Ethereum products in July 2024, including BlackRock’s ETHA. Those offerings were structured as commodity-style grantor trusts holding the underlying digital asset directly, but without yield-generating activity.

In 2025, Nasdaq filed and later withdrew a proposal to allow staking within ETHA, underscoring regulators’ sensitivity about combining staking with registered crypto ETPs. BlackRock instead pursued ETHB as a separate trust with bespoke disclosures.

ETHB’s prospectus says staking will occur only to the extent the sponsor determines it can do so “without incurring undue legal or regulatory risk,” including risks to the trust’s tax classification. It also highlights technical risks such as validator penalties (“slashing”), smart contract vulnerabilities, and the possibility that ether may be locked for days or weeks in Ethereum’s validator exit and withdrawal queues.

In late 2025, the IRS added another piece to the framework with a revenue procedure creating a safe harbor for digital asset staking within grantor and investment trusts, provided certain conditions are met—guidance ETHB cites in explaining its tax treatment.

Debate over decentralization, fees, and precedent

The launch has prompted debate in crypto circles about Ethereum’s decentralization and the economics of staking. With Coinbase already operating a significant share of Ethereum validators, critics warn that routing more assets into Coinbase-run or Coinbase-related validators could further concentrate consensus power in U.S.-regulated intermediaries.

Some researchers and community commentators argue that if large custodians or asset managers face pressure to comply with sanctions or other directives at the validator level, they could censor certain transactions or addresses, affecting Ethereum’s neutrality. Others counter that Ethereum’s open validator set and client diversity are designed to mitigate concentration.

Investor advocates and decentralized finance proponents have also scrutinized ETHB’s cost structure. While the trust simplifies staking for investors unwilling or unable to manage private keys or interact with protocols directly, its 18% cut of rewards plus the 0.25% sponsor fee can exceed the costs faced by sophisticated users staking directly or via liquid staking protocols. BlackRock positions the product as a regulated and operationally straightforward route to staking income, especially for clients bound by compliance or custody rules.

The product could be particularly relevant in advisory and retirement channels, where grantor trust ETPs can be held in individual retirement accounts and, in some cases, 401(k) plans. In tax-advantaged accounts, staking income generated inside ETHB would be subject to the account’s overall tax treatment rather than immediate taxation at the individual level.

What comes next

ETHB’s debut may serve as a template for future funds. The combination of SEC-accepted spot crypto ETP structures and IRS staking guidance could pave the way for staked products tied to other proof-of-stake networks—or multi-asset digital yield vehicles—from BlackRock and rival issuers.

For Ethereum, the arrival of a staking-enabled product from the world’s largest asset manager underscores how far the network has moved into mainstream finance, and how much of its core economic activity is increasingly being routed through traditional intermediaries accountable to U.S. regulators.