We may be in the midst of a cryptocurrency winter, but BlackRock just quietly launched an Exchange Traded Fund (ETF) for institutional clients that could make Ethereum look like a reliable investment rather than volatile speculation.
The new ETF — iShares Staked Ethereum Trust — offers staking, which lets investors earn roughly 3% by helping run the Ethereum network. It’s just the first of nearly a dozen Ethereum staking ETFs set to be unveiled this year.
Staking essentially allows investors to earn yields by contributing their tokens to help verify transactions on the network — like owning a blue chip stock that pays dividends, but with cryptocurrency.
For traditional investors, it’s a way to get exposure to crypto without dealing with cryptocurrency exchanges or the technical complexities of digital wallets.
And it represents a fundamental shift for an industry built on wild price swings. More than 10 other staking ETFs are expected to launch in the coming year, signaling institutional crypto is finally maturing.
“I think it sort of establishes the risk-free rate in crypto,” Lorien Gabel, co-founder and CEO of Figment, the largest global staking infrastructure provider, told me. “You can get 3% approximately holding Ethereum and be relatively sure about that.”
Of course, staking does carry some risk. In the event Ethereum completely crashes, there’s no FDIC protection.
Unlike Bitcoin, which is primarily a digital currency focused on secure, peer-to-peer transactions without supporting complex applications, Ethereum operates as a sophisticated blockchain platform powering apps, smart contracts and its native currency, Ether.
“Ethereum, to me, is really gonna be where Wall Street meets crypto,” Tom Lee of BitMine Immersion Technologies previously told me, explaining why he was bullish on the cryptocurrency.
And now as huge major asset managers embrace it, more and more people will gain exposure.
The ultimate test of mainstream adoption? “Maybe your mother will be staking,” Gabel predicted. When the world’s largest asset manager makes crypto boring and profitable, that future isn’t far behind.