Ethereum (CRYPTO: ETH) has climbed back above $3,000, but a new product in the pipeline from BlackRock is raising fresh concerns over Ethereum's long-term direction.
What Happened: Bloomberg's Eric Balchunas on Wednesday pointed out that BlackRock has registered a new staked Ethereum ETF in Delaware, signaling plans to expand beyond its blockbuster iShares Ethereum Trust (NASDAQ:ETHA), a fund that has already attracted $13.1 billion since launching in July 2024.
Unlike ETHA, the new ETF would integrate staking, offering investors both ETH exposure and ~3.95% in annual staking rewards. This would effectively turn it into a total-return product, appealing to yield-focused institutions.
BlackRock previously asked the SEC to permit staking within ETHA, and the new filing comes as the Trump administration shows a far more crypto-friendly regulatory stance.
Staked ETH ETFs from Grayscale and REX-Osprey have already begun trading, accelerating competition.
Also Read: Why Do Bitcoin, Ethereum Suddenly Underperform Altcoins?
Why It Matters: Speaking at Devconnect in Buenos Aires, Vitalik Buterin issued one of his strongest warnings yet: if mega-asset managers like BlackRock continue accumulating ETH at their current pace, Ethereum could face "community erosion" and pressure toward technical choices that undermine decentralization.
Institutions now hold over $18 billion in ETH through ETFs, and projections suggest they may soon control 10% or more of the total supply, DL News reported.
Buterin argued this creates a dangerous tension, institutional inflows bring legitimacy but also risk reshaping Ethereum around Wall Street incentives. "Ethereum optimised for Wall Street becomes an Ethereum that only Wall Street can use," he added.
He urged the community to remain focused on what Ethereum exists to provide: a global, permissionless, censorship-resistant protocol, not a yield product for traditional finance.
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