BlackRock just dropped a bombshell proposal with the SEC, seeking approval to let its massive $7.9 billion Ethereum ETF start staking its ETH holdings for extra profits. The move would transform ETHA into an income-generating machine, similar to earning interest on savings. With the SEC having until April 2026 to decide and analysts predicting approval by late 2025, this regulatory showdown could reshape the entire crypto ETF environment and release serious competitive advantages.
BlackRock is pushing hard for something that could change everything about its mammoth Ethereum ETF. The asset management giant filed a Rule 19b-4 proposal through Nasdaq, asking the SEC to let its iShares Ethereum Trust (ETHA) stake its ETH holdings.
Translation? They want to make money while they sleep.
The proposal would amend ETHA’s prospectus to permit staking of Ethereum held by the fund. Staking means using ETH to validate transactions on the Ethereum blockchain, generating additional income in the process. It’s like earning interest on your savings account, except this savings account holds digital assets worth billions. Smart contract vulnerabilities continue to pose significant risks to staking operations, with substantial financial losses reported in 2024.
It’s like earning interest on your savings account, except this savings account holds digital assets worth billions.
ETHA isn’t some small-time player. It’s the largest Ethereum ETF by assets under management, holding over $7.9 billion as of mid-July 2025. On one recent day alone, it attracted $499 million in inflows. Over nine days in July, ETH ETFs collectively saw inflows exceeding $2.2 billion. People are clearly hungry for Ethereum exposure.
The SEC has until April 2026 to make its decision, though analysts predict approval could come by late 2025. That’s a long time to wait, but BlackRock has company. Fidelity, Grayscale, 21Shares, and Franklin Templeton all have similar staking plans in the works.
Everyone wants a piece of this action.
The regulatory environment is actually warming up. The SEC recently approved the first-ever staking crypto ETF with Osprey’s Solana offering, setting precedent. Multiple exchanges including Cboe BZX and NYSE Arca have filed similar staking proposals for other Ethereum funds. The SEC is expected to decide on similar requests from Cboe and NYSE by October 2025.
But it’s not all effortless sailing. Critics worry about security vulnerabilities and market manipulation risks associated with staking within ETFs. The SEC has exercised caution given the novel nature of Ethereum staking in regulated funds. No staking fund has been approved under SEC Rule 1934 to date. Fair enough – this stuff is complex.
If approved, ETHA would join competitors in offering staking capabilities. For investors, it could mean considerably higher returns through additional yield. For BlackRock, it means staying competitive in a rapidly evolving market.
The battle lines are drawn, and billions hang in the balance.
