Cryptocurrencies can also "earn dividends"? Wall Street offers a "sweet new trick" for ETF investors.

Wall Street is now offering a new reason for cryptocurrency ETF investors: earning interest on holdings. Last Thursday, the asset management giant BlackRock, Inc. (BLK.US) launched the iShares Staked Ethereum Trust ETF (ETHB.US). This product provides investors with exposure to Ethereum while also generating potential income through staking a portion of the fund's assets. Staking refers to locking up tokens to help validate and secure the Ethereum network, and in return, earning rewards. Jay Jacobs, the head of U.S. stock ETFs at BlackRock, Inc., said, "It's a bit like holding stocks to earn dividends." This potential passive income sets it apart from early cryptocurrency ETFs such as the Bitcoin ETF-iShares (IBIT.US) and the Ethereum ETF-iShares (ETHA.US), which mainly track the prices of digital assets. Strategists point out that the current annualized return for fully staked Ethereum is around 2.5%3%. This level is higher than the approximately 1.1% dividend yield of the S&P 500 index, but lower than the 4.2% yield of the U.S. 10-year benchmark Treasury bond. BlackRock, Inc. plans to use 70%-95% of the fund's assets for staking and distribute earnings monthly. Jacobs said, "We've heard from various clients and investors that they want to participate in Ethereum staking rewards while investing in Ethereum." With the wave of tokenizing real-world assets on blockchains like Ethereum, staking has become a key tool that creates a new dimension for generating income from digital assets and reshapes how investors position themselves in cryptocurrency. Regulatory changes and the passing of the stablecoin bill "GENIUS" and pending legislation in Congress have driven broader applications of cryptocurrencies and blockchain technology. David Grider, partner at the digital assets investment firm Finality Capital, said, "As the market matures and regulatory environment evolves, these products have now become a choice that market participants are willing and able to provide." It is expected that more ETFs offering substantial returns will continue to emerge in the future. Last Thursday, Grayscale also launched the Grayscale Avalanche Staking ETF (GAVA.US), which provides investors with exposure to the native token AVAX of the Avalanche network while participating in the staking process. Grayscale enabled staking for its largest Ethereum ETF, Grayscale (ETHE.US), last year and distributed the first batch of staking rewards to shareholders in January, with a dividend of 0.083178 USD per share. This marks the first time that a U.S.-listed spot cryptocurrency ETF has directly distributed staking rewards to investors. Other staking ETFs include Bitwise Solana Staking ETF (BSOL.US) and VanEck Solana ETF (VSOL.US), both of which were listed in October last year. While some traders may prefer to hold the underlying assets directly allowing them to stake on their own and trade cryptocurrencies around the clock other investors may see ETFs as a more traditional investment option. Grider believes, "Overall, for long-term retail investors, ETFs are the most convenient, cost-effective, and yield-optimized way to gain exposure to these assets."