BlackRock has launched its iShares Staked Ethereum Trust ETF (ETHB) on Nasdaq, marking its third crypto ETF offering. This move comes as the firm faces scrutiny over redemption limits imposed on its $26 billion HPS private credit fund, HLEND. Withdrawal requests from HLEND surged to $1.2 billion in the first quarter, leading BlackRock to cap payouts at approximately $620 million, or 5% of the fund's net asset value.
The ETHB ETF distinguishes itself by providing investors with exposure to both the spot price of Ethereum and staking rewards. BlackRock plans to stake between 70% and 95% of the fund's Ether holdings, aiming to generate passive income for investors. This approach seeks to transform Ether from a speculative asset into a total-return product. Coinbase will act as the custodian and staking provider for the new fund. Validators include Figment, Galaxy, and Attestant.
ETHB enters the market with a 0.25% sponsor fee, which will be temporarily reduced to 0.12% for the first year on the first $2.5 billion in assets under management. BlackRock will also deduct 10% of the staking rewards generated by the fund. Jay Jacobs, BlackRock's U. S. head of equity ETFs, emphasized that ETHB is about "investor choice" and maximizing total returns by combining price exposure with staking yields.
The launch of ETHB occurs against a backdrop of increasing institutional interest in crypto yields and potential liquidity concerns in the private credit market. While BlackRock already manages the iShares Ethereum Trust (ETHA) with over $6 billion in assets, ETHB offers a unique proposition by integrating staking rewards. The ETF aims to attract a wide range of investors, from retail traders to institutional holders, seeking exposure to Ethereum with the added benefit of potential staking income.
