 ▲ BlackRock and Coinbase to Take 18% of Ethereum Staking Rewards… Will Investors Object?/Gemini-generated image |
BlackRock, the world’s largest asset manager, and cryptocurrency exchange Coinbase have announced plans to take an 18% fee from the staking-based Ethereum (ETH) exchange-traded product they are preparing to launch, sparking both expectations and deep concerns over the expanding influence of Wall Street capital in the crypto ecosystem.
According to DL News on Feb. 18 (local time), BlackRock stated in a filing submitted Tuesday to the U.S. Securities and Exchange Commission (SEC) that it intends to distribute 82% of staking rewards from its upcoming Ethereum exchange-traded fund (ETF), ETHB, to investors, while the remaining 18% will be shared by BlackRock and the fund’s primary execution agent, Coinbase. This structure is expected to serve as a strong financial incentive for the issuer to maximize the amount of Ethereum deposited within the trust.
BlackRock currently dominates the digital asset ETF market. According to DefiLlama data, its existing spot Ethereum ETF, ETHA, holds more than $9.1 billion in assets under management, maintaining an overwhelming lead over Grayscale’s ETHE, which holds $2.3 billion. Unlike existing products, the new ETHB is projected to generate staking yields estimated at 2.8% annually, positioning it advantageously to become the largest Ethereum ETF in the market.
Although the spot Ethereum ETFs approved by the SEC early last year did not include staking rewards, the regulatory landscape shifted in May when clear guidance indicated that certain staking products do not qualify as securities, effectively opening the door for related ETFs. Accordingly, ETHB plans to stake between 70% and 95% of its total assets in Ethereum to ensure smooth handling of investor redemption requests and to prevent excessive premiums or discounts relative to net asset value.
While ETFs introduced by major asset managers have become a key driver of the Bitcoin rally by offering U.S. investors a familiar and accessible investment vehicle, some in the industry warn against the growing dominance of Wall Street. Ethereum co-founder Vitalik Buterin has strongly cautioned that a concentration of Ethereum ownership on Wall Street could distort the blockchain’s native governance and create critical centralization bottlenecks.
Meanwhile, BlackRock is not the first asset manager to enter the staking-based Ethereum ETF race. Grayscale’s Ethereum ETFs, ETHE and ETH, have already established yield-generating structures through staking, and VanEck has also swiftly applied to introduce a staking-enabled spot Ethereum ETF, signaling intensifying competition for market leadership.
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