BlackRock is deepening its push into digital assets with a new filing for the iShares Staked Ethereum Trust ETF, its first U.S. product designed to offer direct staking exposure to institutional investors. The move builds on the firm’s existing Ethereum fund, which has grown to over $11 billion in assets, and reflects a growing market appetite for yield-generating crypto strategies.

The proposed fund, detailed in a preliminary prospectus, will track the price performance of ETH while also capturing rewards from staking a portion of its holdings. The trust will issue shares representing fractional ownership of its ether assets. Any staking rewards received are intended to increase the fund’s net asset value, though the filing acknowledges that regulatory and operational risks could affect performance.

A Multi-Custodian Framework for Institutional Trust

The filing outlines a layered custody and administration model designed for institutional security and compliance. Coinbase Custody Trust Company is slated to serve as the ETH custodian, while BNY Mellon will act as the cash custodian and administrator.

To further bolster regulated oversight and redundancy, Anchorage Digital Bank is listed as an additional custodian. This structure, with BlackRock Fund Advisors as trustee, signals a clear intent to build an infrastructure that meets institutional standards for risk management.

Provider-Facilitated Staking Operations

Instead of running its own validator infrastructure, the trust will rely on approved third-party staking service providers. The fund’s sponsor will allocate assets for staking based on a provider’s performance, reliability, and reputation. These operations may be carried out by affiliates of the custodians or other regulated partners.

The prospectus notes both the potential for rewards and the risk of slashing as important considerations for investors. The trust intends to list its shares on NASDAQ under the ticker “ETHB,” with creation and redemption occurring in standardized baskets of 40,000 shares.

Institutional Demand Shifts Toward Yield-Bearing Products

BlackRock’s filing indicates a strategic pivot as institutional investors increasingly seek exposure beyond price-only products. The market is showing a clear interest in tokenized financial instruments that generate yield. If approved, the ETF could also help establish how staking rewards are classified by U.S. regulators, a topic still evolving within the industry.

This staked ETH ETF positions BlackRock to shape the next phase of digital asset adoption, where investment is grounded in the operational economics of blockchain networks rather than just speculation.

Contrast with Bitcoin ETF Outflows

Meanwhile, BlackRock’s iShares Bitcoin Trust has recorded its longest stretch of weekly withdrawals since its launch in January 2024. This marks a sharp turn in institutional sentiment toward Bitcoin, even as prices have steadied. According to data from SoSoValue, investors pulled more than $2.7 billion from the fund over the five weeks ending November 28. An additional $113 million in redemptions has put the ETF on track for a sixth consecutive week of outflows.