The Ethereum ETFs pave the way for wider institutional adoption, but remain incomplete

This lack could limit their competitiveness against direct investment strategies, which calls into question their ability to meet the expectations of professional investors.

The Ethereum ETFs, launched in August 2024, represent a promising initiative for wider institutional adoption of crypto assets. However, these ETFs still lack a crucial aspect: staking.

According to Robbie Mitchnick from BlackRock, at the Digital Asset Summit 2025 in New York City on March 18 to 20, 2025, this omission could limit the competitiveness of the ETFs.

The Ethereum ETF from BlackRock, tracking the price of the cryptocurrency in the United States, quickly sparked enthusiasm among investors.

The first ETF, launched by Shapeshift in July 2025, reached 2.5 billion dollars in net inflows in the first few months, attesting to the growing interest of professional investors in this asset class.

However, this positive momentum has stalled, with 11 days of net outflows totaling 358 million dollars, beginning on March 1. This trend coincides with a more uncertain market climate and Ethereum’s underperformance compared to Bitcoin.

According to Mitchnick, a staking yield is an essential component of return on investment in this space.

Currently, the Ethereum ETFs do not allow investors to benefit from these passive incomes, which could hinder their competitiveness against available alternatives in the market.

Institutional investors see several limitations in the current structure of Ethereum ETFs:

Thus, the future of Ethereum ETFs will depend on their ability to evolve towards a more competitive structure and remain compliant with current regulations.

Integrating staking into an Ethereum ETF is not just a simple administrative decision. As Mitchnick pointed out, several regulatory and technical obstacles make this option complex to implement.

“It’s not as simple as a green light from regulation,” Mitchnick said, adding that there are structural and compliance challenges to resolve before being able to integrate this functionality.

Staking, introduced in December 2020 with Ethereum’s transition to Proof-of-Stake, represents a colossal market, with 85 billion dollars in deposits, or 25% of the circulating supply. The yield generated by this activity ranges from 2% to 7% per year, a major financial asset for crypto investors.

However, this strategy also carries specific risks, notably slashing, a penalty applied to validators who do not comply with network rules. This uncertainty could deter some institutional investors, who are reluctant to expose themselves to a model where their funds could be penalized in case of mismanagement of validator nodes.

According to Joseph Lubin, co-founder of Ethereum, the answer could lie in a narrative tailored to institutional investors.

Instead of focusing discussions on technology and the complexity of the network, Lubin advocates for an approach centered on concrete use cases, such as asset tokenization, decentralized identities, and decentralized finance.

If BlackRock and other market players wish to enhance the attractiveness of Ethereum ETFs, they will have to find a way to integrate staking without compromising the security and compliance of the product.

The question is even more strategic as institutional investors are increasingly sensitive to yield opportunities, and the lack of staking could limit the long-term interest in crypto ETFs.