BlackRock Files SEC Proposal to Add Staking Feature to Spot Ethereum ETF

The world's largest asset manager, BlackRock, has filed a proposal with the U.S. Securities and Exchange Commission (SEC) to add staking functionality to its iShares Ethereum Trust (ETHA) spot Ethereum exchange-traded fund (ETF).

Nasdaq, which lists the ETF, has filed a rule change under Section 19b-4 to propose amending its prospectus to allow the fund to engage in ETH staking, a mechanism for generating profits by validating transactions on the Ethereum network.

If approved, the staking feature would provide an additional source of income for the ETF from staking rewards. According to the proposal, "The Fund would receive all or a portion of the staking rewards generated by the provider, which may be counted as income for the trust."

ETHA, launched in July last year, is now the most successful Ethereum spot fund on the market, attracting more than $7 billion in net inflows, more than double the total inflows of competing funds. As investors increasingly seek passive returns through digital assets, the integration of staking features could become a key competitive advantage.

In addition to BlackRock, several other major ETF issuers including Fidelity, Grayscale, and 21Shares have also filed to include staking in their Ethereum ETFs. The SEC is currently considering similar proposals from Cboe and NYSE, and must make a decision on those funds by October. For BlackRock’s ETHA, the official review deadline is April 2026, but analysts say the SEC could make a decision sooner.

According to Bloomberg Intelligence ETF analyst James Seyffart, approval of the staking feature is likely to occur in the fourth quarter of 2025, depending on the SEC’s stance on new revenue models in the digital asset market.

However, staking in ETFs remains a controversial topic. Proponents argue that it is a reasonable way to increase yields and make funds more efficient, while critics are concerned about potential security risks and the possibility of market manipulation.

Currently, the prospectuses of ETHA and eight other currently traded Ethereum ETFs do not include staking. Nasdaq’s 19b-4 filing aims to remove the language prohibiting staking and replace it with new language that allows it.

In addition to the proposed staking feature, the SEC is also delaying decisions on filings related to the “repurchase in kind” mechanism of the Bitwise Bitcoin ETF Trust and Bitwise Ethereum ETF. The latest deadline for a decision is set for September 8, 2025, reflecting continued caution from US regulators, despite a more positive regulatory environment for cryptocurrencies.

With Ethereum funds seeing a surge in inflows of more than $2.3 billion in just nine days, the addition of staking could mark a major shift in how crypto ETFs operate and optimize returns for investors. On Wednesday alone, Ethereum funds saw record inflows of $726.6 million, with ETHA contributing nearly $500 million.

If approved, BlackRock’s proposal would not only usher in a new era for Ethereum ETFs, but also set a precedent for integrating DeFi with traditional finance at the institutional level.