BlackRock’s (BLK) new iShares Staked Ethereum Trust (ETHB) that offers yield to investors had a strong market debut.
The cryptocurrency fund launched on March 12 with $100 million U.S. in assets and saw more than $15 million U.S. in first day trading volume, signaling strong demand among investors.
Unlike spot cryptocurrency ETFs that track the price movements of Bitcoin (BTC) and Ethereum (ETH), ETHB stakes 70% to 95% of its Ether and distributes about 82% of staking rewards to investors via monthly payments.
The fund charges a 0.25% sponsor fee, temporarily discounted to 0.12% on the first $2.5 billion U.S. in assets, and could lead to more yield-generating ETFs tied to proof-of-stake networks.
Staking is the process of locking up cryptocurrencies to help validate transactions on a blockchain, acting as a validator to help secure the network.
In return for staking their crypto, users receive rewards in the form of passive income, making it a way to earn yield. Crypto staking is similar to earning interest on cash held in a bank account.
Analysts say that the new BlackRock fund marks a significant evolution in cryptocurrency exchange-traded funds (ETFs).
There’s hope among crypto bulls that staking ETFs will help improve sentiment towards digital assets and their prices.
Ethereum is currently trading at $2,130 U.S. Its price has fallen by more than 50% since nearing $5,000 U.S. last August.
