BlackRock Files with SEC for In-Kind Redemptions on Its Ethereum ETF: Here’s What It Means for ETH
May 12, 2025
BlackRock has submitted an amended S-1 form to the U.S. SEC, proposing the inclusion of in-kind creation and redemption for its iShares Ethereum Trust ETF, ETHA.
James Seyffart, a senior ETF analyst at Bloomberg, was the first to share details of this filing on X, confirming that the asset manager made the move on May 9. He revealed that the amended form now includes language that would allow in-kind redemptions once the SEC approves.
BlackRock Pushing for In-Kind Redemption: What Does It Mean?
Seyffart, alongside fellow Bloomberg analyst Eric Balchunas, expects that the agency will approve in-kind processes at some point within 2025. Notably, the final deadline for the SEC to deliver a verdict on this application is November 10, 2025.
For the uninitiated, in-kind redemptions represent a crucial feature for many institutions. Instead of redeeming ETF shares for cash, authorized participants would be able to directly exchange shares for the underlying asset, in this case, Ethereum (ETH).
This model could reduce transaction costs, minimize taxable events, and may even lead to greater operational flexibility, all of which are especially beneficial in the crypto markets.
BlackRock Also Wants to Include Staking in Its Ethereum ETF
While this recent filing centers on redemption processes, BlackRock is also actively engaging the SEC on another pivotal issue: staking. According to internal discussions with the SEC’s Crypto Task Force, BlackRock is pushing for ETHA to include staking features.
Robert Mitchnick, the firm’s head of digital assets, has noted that staking is an important part of Ethereum’s investment appeal. Mitchnick argues that excluding staking from Ethereum ETFs overlooks a major portion of potential yield, and this limits the attractiveness of such products to investors.
Although the SEC has not yet approved staking, the conversations are ongoing. Seyffart previously suggested in April 2025 that while early approval for staking is possible, the final decision is expected by late October, with interim milestones likely in May and August.
BlackRock Ethereum ETF Performing Well
Meanwhile, amid these regulatory developments, ETHA’s market performance continues to show momentum. According to Sosovalue, on May 9, 2025, the fund recorded $17.61 million in net inflows, making it the only Ethereum ETF among nine trading in the U.S. to post positive flows that day.
This followed a $21.77 million outflow on May 7 and zero flow on May 8. The two active trading days, May 7 and 9, marked the only sessions with movement last week, while the remaining days saw no net activity. Essentially, the ETF has amassed $15.94 million in net inflows for May so far.
As of May 9, cumulative net inflows since the fund’s inception in July 2024 stood at $4.2 billion, with total net assets valued at $2.93 billion. Despite volatility in weekly flows, ETHA closed April with $108.19 million in net inflows.
Remarkably, since launch, the ETF has experienced only one month of net outflows, which occurred in March 2025 when it saw $200.81 million withdrawn.
Tags
Latest Ethereum (ETH) News Today
