Spot Ethereum ETFs were approved by the SEC in May 2024 and began trading in July 2024, about six months after the Bitcoin ETF approval. The approved issuers included BlackRock, Fidelity, Grayscale, and others — largely the same group that had launched Bitcoin ETFs. However, the SEC initially prohibited staking within the ETFs, meaning ETH held by the funds could not earn staking yield.
The market response was muted compared to Bitcoin’s ETF launch. Inflows were significant but smaller — ETH ETFs attracted billions rather than tens of billions in their first months. Part of the reason was that Bitcoin’s ETF had already captured much of the institutional demand for crypto exposure. Part was that Ethereum’s investment case — “world computer” vs Bitcoin’s “digital gold” — was harder to explain in a one-page pitch to institutional allocators.
The staking prohibition was particularly frustrating for the Ethereum community. Without staking, ETH in ETFs was a non-productive asset, missing the ~3-4% annual yield that stakers earned. This made the ETH ETF less attractive compared to simply buying and staking ETH directly, which many crypto-native investors preferred. Discussions about allowing staking in future ETF amendments continued through 2025.
Despite the slower start, the Ethereum ETF was still a landmark moment. It gave institutional investors regulated access to the second-largest crypto asset, legitimized Ethereum alongside Bitcoin in traditional finance, and created a permanent demand channel for ETH. The long-term impact may exceed the short-term trading — as more financial advisors and pension funds add crypto to model portfolios, ETH allocation will grow alongside BTC. The ETF turned Ethereum from a niche technology platform into a recognized financial asset class, and that transformation is irreversible.
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