BlackRock’s head of digital assets, Robert Mitchnick, believes staking could be a “major step change” for Ethereum exchange-traded funds (ETFs), potentially reviving investor interest in the asset class.
Speaking at the Digital Asset Summit in New York, Mitchnick highlighted regulatory hurdles as a key factor limiting ETH ETF adoption.
Since their launch in July 2024, Ethereum ETFs have struggled to gain traction compared to the explosive growth of Bitcoin ETFs. Mitchnick attributed this disparity to a common misconception about their success. However, he acknowledged that the inability of ETH ETFs to generate staking returns is a critical limitation holding them back.
“There’s clearly a next level of potential development for Ethereum ETFs,” Mitchnick said. “The ETF has turned out to be a really compelling vehicle for holding Bitcoin for many different types of investors. There’s no question that it’s less perfect today for ETH without staking. Staking returns are a meaningful part of how you can generate ROI in this space, and not all ETH ETFs had staking when they launched.”
Staking allows investors to earn passive returns by locking their cryptocurrency holdings on the network for a set period of time. However, regulatory complexities make integrating staking into ETFs a challenge.
“This is not a particularly easy problem,” Mitchnick said. “This is not as simple as a new administration greenlighting something and then boom, we’re all good, we’re on the record. There are a lot of very complex challenges that need to be solved, but if this can be solved, it would be a step change upwards in terms of what we see activity around these products.”
Despite the current challenges, Mitchnick remains optimistic about Ethereum's long-term potential.
*This is not investment advice.
