KoinlyticsSpot Ethereum ETFs launched in July 2024 after the SEC approved 19b-4 filings from BlackRock (ETHA), Fidelity (FETH), Grayscale (ETHE + ETH mini), and others. Their structure has one meaningful restriction vs Bitcoin ETFs: no staking.
Why staking is not allowed
The SEC's concern: staking could be classified as a security offering. Rather than delay approval, issuers agreed to spot-only ETFs. Funds hold ETH but do not stake it.
What this costs holders
- Direct staking APR: ~3% base + MEV boost.
- ETF holders forfeit that yield.
- Over years, meaningful compounding drag vs holding staked ETH directly.
Adoption
- Aggregate AUM crossed $10B in the first 6 months.
- ETHA (BlackRock) leads.
- ETHE (Grayscale legacy) saw outflows as its 2.5% fee compares poorly.
When staking might be added
Post-2024 US election created a more crypto-favorable SEC. Multiple ETFs have re-filed to allow staking as of 2025. Expected approval timeline: 2026.
Compare
- Self-custody staked ETH: ~3% + MEV, plus DeFi composability.
- Lido stETH: ~3.2% net after fees, DeFi-liquid.
- ETH ETF (no staking): 0% yield, just price exposure.
Who ETH ETFs are for
- Investors who cannot custody crypto (institutional mandates).
- Users who want ETH exposure inside 401(k) / IRA.
- Anyone who values TradFi wrapper > yield.