BlackRock's "Yield-Bearing Ethereum ETF": The Most Significant One

Written by: KarenZ, Foresight News

On March 12, 2026, Nasdaq listed a different kind of crypto ETF: the Ethereum Staking Income Trust ETF, “ETHB.”

This is BlackRock’s iShares Staked Ethereum Trust ETF, and it is the third crypto ETF launched by this global asset management giant.

On its first day of trading, ETHB recorded approximately $15.5 million in trading volume, and on the second day (March 13), about $76 million. At launch, the ETF’s size was around $100 million, and it has now grown to approximately $170 million.

Notably, many reports have dubbed BlackRock’s ETHB as the “United States’ first Ethereum Staking ETF.” However, the interesting part is: this isn’t the first Ethereum staking ETF in the U.S., but it is definitely the most significant one.

First, let’s clarify: What exactly is ETHB?

To understand ETHB, you need to first understand Ethereum’s “staking” mechanism. After Ethereum’s 2022 “Merge,” it adopted a proof-of-stake (PoS) consensus mechanism to secure the network.

Simply put: Lock ETH into the network to help validate transactions, and the system rewards you—similar to interest on a deposit—though the rate is dynamically determined by the network.

According to Ethereum Validator Queue data, the current annualized yield is 2.78%. While this number may not seem high, for long-term ETH holders, it’s a tangible extra income. For institutional investors managing hundreds of millions of dollars in ETH exposure, missing out on staking rewards means real opportunity costs.

ETHB’s purpose is to: make this process compliant and productized, allowing ordinary investors to gain ETH price exposure while earning the “interest” without needing to research how to stake or select validation nodes.

How is ETHB’s fee structure designed?

Breaking down ETHB’s fee layers: The first layer is the management fee, which is 0.25% annually, with a promotional discount of 0.12% during the first 12 months or for the first $2.5 billion in assets. This is the same as ETHA’s 0.25%, but ETHA does not have staking income to offset this cost.

This number seems reasonable, but management fees are only the first layer of the fee structure.

The second layer is the staking reward split. Of each staking reward, 82% is distributed to ETF holders, while the remaining 18% goes as staking fees paid to the trust sponsor and broker-dealer. The trust sponsor is BlackRock’s iShares Delaware Trust Sponsor LLC, and the broker-dealer is Coinbase Inc. After receiving this fee, Coinbase is responsible for paying downstream validators such as Figment, Galaxy Digital, and Attestant.

The ETHB filing indicates that 70% to 95% of ETH holdings are staked via Coinbase Custody Trust Company. As of March 12, the ETF had 41,164 ETH staked, representing about 80% of its holdings. However, after the scale increased on March 13, the active staking ratio dropped to 56%.

Suppose you invest $100, with a staking ratio of 70%–95%, and an annual yield of 2.78%, generating rewards of $1.95 to $2.64.

First layer deduction: 18% staking fee, so you receive 82% of the reward, approximately $1.60 to $2.17.

Second layer deduction: management fee, based on total holdings of $100, at a standard rate of 0.25%, or 0.12% during the promotional period.

Your net annualized return:

• At standard fee rate: $1.60 – $0.25 = $1.35 to $2.17 – $0.25 = $1.92, corresponding to 1.35%–1.92% annualized.

• During promotional rate: $1.60 – $0.12 = $1.48 to $2.17 – $0.12 = $2.05, corresponding to 1.48%–2.05% annualized.

Therefore, the nominal staking yield of 2.78%, after two layers of deductions, results in an actual investor yield of approximately 1.35%–2.05%, depending on the staking ratio and whether it’s during the promotional period.

This isn’t a cheap product, but it offers a compliant way to earn staking rewards without operating nodes or holding private keys. For regulated institutional players, this premium is meaningful.

BlackRock’s ETHB is not the first, but it follows the most standard approach.

When Ethereum spot ETFs launched in 2024, SEC approval included a clear restriction: the fund could not stake its ETH holdings. The logic was that staking might constitute a securities offering. As a result, ETHA holders only gained pure ETH price exposure, without additional staking income.

This restriction eased in 2025. In May 2025, the SEC’s Division of Corporation Finance issued guidance clarifying that “staking activities on certain PoS blockchain protocols do not constitute securities transactions under federal securities laws,” effectively opening a legal green light for Ethereum staking ETFs. Regulatory policies further relaxed afterward.

Before ETHB, two firms launched Ethereum staking ETFs with very different approaches:

REX-Osprey ETH + Staking ETF (ESK) was the earliest Ethereum staking ETF in the U.S., launched on September 25, 2025, on the Cboe BZX by REX Shares and Osprey Funds.

Unlike products like IBIT, ETHA, and ETHB, which follow the “1933 Act” route (filing S-1 registration as a commodity trust or spot ETP, with exchange submitting 19b-4 rule amendments for approval), ESK chose the “1940 Act” framework—standard for traditional mutual funds and most stock and bond ETFs.

However, the “1940 Act” prohibits direct holding of crypto assets. REX-Osprey’s solution was to establish a wholly owned subsidiary in the Cayman Islands (REX-Osprey ETH + Staking Cayman Portfolio S.P.), which holds ETH and performs staking. The main fund gains indirect exposure to ETH prices and staking rewards through this structure. This clever setup bypassed SEC restrictions on commodity ETFs, enabling compliant staking.

Grayscale’s Ethereum Staking ETF (ETHE) took an “upgrade” approach. Its predecessor, the Grayscale Ethereum Trust, was established in 2017. After Ethereum spot ETF approval in 2024, it converted into an ETF listed on NYSE Arca, subject to U.S. Securities Act rules.

ETHE activates staking by submitting a revised 19b-4 rule change request to the SEC, asking to add staking functionality within the existing framework. Compared to a full S-1 approval process for a new product, modifying an existing product is much faster. Grayscale completed staking activation about five months before BlackRock, in October 2025.

But this “patch” approach has costs: ETHE inherited high management fees as a trust product—up to 2.50% annually—much higher than ETHB, making long-term holding more expensive.

BlackRock’s ETHB chose a third path: a fully compliant new registration. In December 2025, BlackRock submitted a new S-1 registration for ETHB, and Nasdaq filed a 19b-4 rule change application, following a complete new product approval process. ETHB was approved in just about three months and listed smoothly in March 2026.

BlackRock avoided the “detour” of ESK and the “upgrade” of Grayscale, opting instead for the most compliant, transparent approach—most suitable for institutional capital. The key advantage: the lowest fee—0.25% annual management fee (0.12% promotional), significantly lower than ETHE and ESK, making it highly attractive to institutional investors.

ETHB is established under the framework of the Securities Act of 1933, with some simplified disclosure arrangements as a fast-growing company (EGC), and is not bound by the “1940 Act,” unlike ESK, which follows a completely different regulatory logic.

Summary

Since Ethereum switched from PoW to PoS, it has become an asset that can generate “holding income.” But for most traditional finance participants, the barriers to directly staking ETH—custody risks and compliance hurdles—render this income path largely inaccessible.

ETHB’s role is to package this on-chain staking activity into a Wall Street-friendly vehicle.

For early entrants like ESK and ETHE, this may be a moment to remain cautious.