BlackRock Doubles Down: Wall Street Titan Demands Ethereum Staking in Groundbreaking ETF

Wall Street's $10 trillion gorilla just rattled crypto's cage—again.

BlackRock's latest power play? Bulldozing regulators to include ETH staking in its proposed spot ETF. Because apparently 9-figure yields aren't enough for traditional finance's new crypto sweetheart.

Here's why this changes everything (and why your bank manager still won't approve your crypto portfolio).

The staking showdown

Forget 'wait and see'—BlackRock's playing regulatory chicken with the SEC. Their filing explicitly includes Ethereum's proof-of-stake rewards mechanism, directly challenging Gary Gensler's anti-crypto crusade.

Institutional FOMO reaches DEFCON 1

After scooping up 80% of Bitcoin ETF inflows, Larry Fink's money machine wants the full DeFi buffet. ETH staking offers what Wall Street craves most: predictable yields in a zero-rate world. Even if they still don't understand the tech.

The irony? Traditional finance spent years mocking 'magic internet money'—now they're fighting to print risk-free returns from it. Somewhere, a Goldman Sachs VP is explaining staking rewards to his baffled boomer clients.

Game theory says the SEC folds. When BlackRock talks, DC listens. And with $500B+ in dry powder waiting, Ethereum's supply crunch just got real.

Welcome to financialization 2.0—where the suits adopt your tech but still charge 2-and-20 for the privilege.

TLDR

• Nasdaq filed an amended 19b-4 application with the SEC to add staking to BlackRock’s iShares Ethereum Trust ETF (ETHA)
• The feature would allow the ETF to earn yield by staking ether to help validate transactions on the Ethereum network
• Several other asset managers including Franklin Templeton and Grayscale have proposed similar staking features for their Ethereum ETFs
• The SEC previously released guidance classifying staking rewards as earned income rather than securities transactions
• ETHA currently trades at $25.42 per share with over $7.2 billion in assets under management

Nasdaq submitted an amended 19b-4 filing to the Securities and Exchange Commission on Thursday seeking approval to add staking capabilities to BlackRock’s iShares ethereum Trust ETF (ETHA). The move would allow the fund to earn additional yield by participating in Ethereum’s proof-of-stake consensus mechanism.

BlackRock wants to integrate Ethereum staking into its ETF, the application has been officially submitted ⚡️

➟ The financial giant is thus following the potential CLARITY Act (Sec. 202c), which explicitly permits staking and other blockchain functions.

So far, over 99% of… pic.twitter.com/uXMLnoKrMG

— KryptoFL (@Sion_Forever82) July 17, 2025

The filing represents BlackRock’s effort to expand beyond simple ether exposure and generate staking rewards for investors. If approved, the ETF could stake a portion of its ETH holdings through trusted providers to earn regular payouts from network validation.

Ether staking involves locking up tokens to help secure the Ethereum network in exchange for rewards. The process has become increasingly popular as institutional investors seek yield-generating opportunities in the crypto space.

The application follows SEC guidance released in May that classified staking rewards as earned income rather than securities transactions subject to capital gains tax. This guidance opened doors for institutional investors to earn yield on their ETH holdings.

BlackRock is not alone in pursuing staking features. Several other asset managers including Franklin Templeton and Grayscale have proposed similar staking capabilities in their Ethereum ETF filings. The SEC has delayed its first deadline to make decisions on those proposals.

The ETHA fund currently trades at $25.42 per share and has attracted over $7.2 billion in assets since launching in June of last year. The fund’s strong performance reflects growing institutional interest in Ethereum exposure.

Growing Institutional Demand

Staking for crypto exchange-traded funds has been a feature long sought by traditional financial institutions and asset managers. The ability to generate income from holdings appeals to treasury strategists looking beyond passive storage.

Recent data shows Ethereum treasury companies purchased 540,000 ETH worth $1.6 billion in the last month for their corporate reserves. This buying activity demonstrates increasing corporate adoption of ether as a treasury asset.

The amount of staked ETH reached an all-time high of 36,036,981 tokens in July, accounting for over 29% of the circulating supply. This represents a continued trend of growing network participation and security.

Market Performance and Flows

Capital flows into Ether investment vehicles were positive for 11 out of the last 12 trading days according to Farside Investors. Over $726 million flowed into the ETFs on Wednesday alone.

The strong flows mark a recovery from earlier this year when performance was stunted by macroeconomic fears and flight to safety from risk assets. June and July have shown particularly strong performance for Ethereum ETFs.

U.S. regulators have yet to definitively decide whether staking services offered through an ETF WOULD qualify as securities activity. However, the inclusion of staking in the BlackRock filing reflects growing confidence that staking could eventually be part of crypto ETFs.

The SEC is widely expected to approve additional spot crypto ETFs this year after approving Bitcoin and ether products last year. The staking feature would represent a new evolution in crypto ETF offerings.

The Ethereum Foundation has backed the creation of Etherealize, a marketing firm tasked with exposing institutional investors to the layer-1 smart contract network. This effort aims to attract more institutional interest to the Ethereum ecosystem.