Top asset manager, BlackRock, has submitted a proposal to launch a new iShares Staked Ethereum ETF. This filing boosted the market mood with the price of ETH surging as investors reacted. If the U.S. SEC approves, the fund will be traded under the ETHB ticker.
How Will BlackRock’s ETHB Stake Its Ethereum?
In the filing, BlackRock explained that the ETF will track the price of Ethereum and where permitted, the fund will receive staking rewards. Coinbase Custody and Anchorage Digital will be the main and backup custodians for ETHB respectively.
The trust will stake 70% to 90% of its ETH holdings. Continued Ethereum accumulation by institutions further supports the trend.
A notable example is Bitmine, which keeps buying ETH even when the market is in a downturn. According to SEC document, the choice of staking will be based on regulatory clarity and operational safety.
The trust can reduce staked amounts when the network is faced with security threats or liquidity pressure. BlackRock made it clear that it will be a passive staker and not run its own validators.
Following the filing, Bloomberg ETF analyst Eric Balchunas noted that BlackRock is trying to provide investors with options to have diversified crypto exposures.
This includes its recent large-scale Bitcoin and Ethereum purchases. The arrival of a staked product gives institutions a way to access Ethereum’s yield without technical steps.
ETHB Opens New Path for Ethereum Access
The trust will issue shares that represent fractional ownership of its ETH holdings. Shares will list on Nasdaq after approval, allowing investors to trade ETHB like any traditional asset.
The filing also notes that only authorized players can develop and sell massive volumes of the ETF’s shares. Retail investors can purchase and sell ETHB on exchanges.
The filing acknowledges the risks in staking and the volatility of Ethereum. Hence, it cautions that the performance of the fund could be affected by validator issues or delays in withdrawing funds. Top industry supporters are still favoring Ethereum as a hedge against financial crisis.
This BlackRock filing is one of the greatest milestones for institutional adoption of Ethereum. It indicates rising trust in Ethereum’s value in the financial markets over the long term. An SEC approval might result in the next wave of Ethereum exposure for investors.
Why Is Ethereum Up Today?
The coin’s futures activity also jumped according to CoinGlass data. The derivatives volume and open interest increased by 116% to $84.86 billion and 4% to $38.35 billion, respectively. BlackRock keeps buying more Ethereum and Bitcoin, a factor that increases the anticipation of greater institutional demand for both cryptocurrencies.
ETH price is trading close to $3,128 after an increase of more than 2% over the past 24 hours. According to TradingView data, ETH also rose by almost 4% over the past week.
Source: https://coingape.com/ethereum-records-gains-after-blackrock-filed-staked-eth-etf/