Huobi Founder Launches $1 Billion Ethereum Trust: A Game-Changer for Institutional Crypto Investment in 2025
- Why is a $1B Ethereum trust making waves in 2025?
- How does this trust differ from Bitcoin ETFs?
- What’s driving institutional Ethereum demand?
- Will this trigger an Ethereum supply crunch?
- What’s next for Ethereum’s institutional adoption?
- Ethereum Trust Q&A
In a bold move that could reshape institutional crypto adoption, Huobi founder Li Lin has teamed up with heavyweight Asian investors to launch a $1 billion ethereum trust. This Nasdaq-targeted vehicle aims to provide regulated exposure to ETH, backed by industry titans like Fenbushi Capital and HashKey Group. As Bitcoin ETFs dominate headlines, Ethereum quietly cements its role as a programmable treasury asset—with this trust potentially accelerating its Wall Street debut. Here’s why this matters beyond the billion-dollar price tag.
Why is a $1B Ethereum trust making waves in 2025?
When the founder of a top-5 crypto exchange partners with early ETH whales to drop a nine-figure trust, you know institutional DeFi is getting serious. Li Lin’s Avenir Capital has secured $1B in commitments—$500M from HongShan (ex-Sequoia China) alone—to create what might become the first Nasdaq-listed Ethereum investment vehicle. It’s not just about the money though; the backers read like a who’s who of Asian crypto royalty: Shen Bo (Fenbushi), Xiao Feng (HashKey), and Cai Wensheng (Meitu Inc.), all OG Ethereum investors since 2015. As one BTCC analyst quipped, "This isn’t your grandma’s crypto fund—it’s a regulated gateway for traditional finance to access ETH’s yield-generating potential."
How does this trust differ from Bitcoin ETFs?
While Bitcoin ETFs focus on price exposure, Lin’s Ethereum trust is structured to capitalize on ETH’s dual role as both asset and infrastructure. According to the whitepaper seen by CoinMarketCap, the vehicle will: 1) Stake a portion of holdings to generate yield, 2) Invest in Ethereum-based tokenized assets, and 3) Provide liquidity to institutional DeFi protocols. "We’re not just buying ETH—we’re building the plumbing for next-gen finance," Lin stated at the October 18 launch. This aligns with BlackRock veteran Joseph Chalom’s recent comments that "Ethereum’s real value lies in its ability to tokenize everything from bonds to real estate."
What’s driving institutional Ethereum demand?
The timing isn’t accidental. Three key factors are converging: 1) Ethereum’s Shanghai upgrade finally made staking rewards liquid, 2) Major banks like JPMorgan now use Ethereum for repo transactions, and 3) The SEC’s approval of ETH futures ETFs last year softened regulatory resistance. Consensys CEO Joseph Lubin noted at London’s Digital Assets Summit: "Institutions no longer see Ethereum as just ‘Bitcoin’s younger sibling’—it’s becoming the backbone of programmable finance." Case in point: Meitu’s Cai Wensheng reportedly pushed for the trust after his company earned more from ETH staking in 2024 than from its Core photo-editing business.
Will this trigger an Ethereum supply crunch?
With 32M ETH already locked in staking (per TradingView data), adding another $1B worth (~300K ETH at current prices) could strain supply. The trust plans to acquire ETH gradually through OTC desks to minimize market impact—but as any degenerate DeFi farmer knows, liquid staking derivatives like Lido’s stETH could see renewed demand. "We’re entering an era where institutional ETH holders may outbid retail for yield," observed a HashKey Group spokesperson. This comes as Ethereum’s inflation rate turned negative post-merge, with CoinMarketCap showing just 72K new ETH minted annually versus 4.8M under PoW.
What’s next for Ethereum’s institutional adoption?
The trust could catalyze three developments: 1) More regulated ETH investment products (Swiss banks are reportedly working on similar vehicles), 2) Increased corporate treasury allocations (following MicroStrategy’s bitcoin playbook), and 3) Mainstream adoption of Ethereum as collateral. Not everyone’s convinced though—some critics argue the trust’s 1.5% management fee is steep compared to Bitcoin ETFs. But as Robert Kiyosaki tweeted last week: "Smart money isn’t chasing hype, it’s building infrastructure. That’s Ethereum’s edge."
This article does not constitute investment advice.
Ethereum Trust Q&A
Who are the key backers of this $1B Ethereum trust?
The trust is spearheaded by Huobi founder Li Lin through his firm Avenir Capital, with major funding from HongShan Capital Group ($500M), Avenir Capital itself ($200M), and other private investors. Industry heavyweights like Fenbushi Capital's Shen Bo and HashKey Group's Xiao Feng are co-founders.
How will this trust acquire its Ethereum holdings?
According to insiders, the trust plans gradual OTC purchases to avoid market disruption, potentially working with exchanges like BTCC for liquidity. About 30% of holdings will be allocated to staking via institutional-grade validators.
What makes this different from Grayscale’s Ethereum Trust?
Unlike Grayscale’s product (which trades at a discount), this trust aims for Nasdaq listing with daily creations/redemptions to maintain NAV parity. It also actively generates yield through staking and DeFi participation—something Grayscale’s passive structure doesn’t allow.
Could this trigger regulatory approval for spot Ethereum ETFs?
Industry watchers believe the trust’s structure could serve as a blueprint for ETH ETFs, especially if it demonstrates robust custody solutions and compliance frameworks. SEC approval may still take 12-18 months though.
