Forget ETHA. iShares’ Other Ether Fund Is Nearly Identical, Except It Pays You
BlackRock quietly launched a second Ethereum ETF that runs nearly identical to its blockbuster first one, with one structural difference that long-term holders of the original are forfeiting real money by ignoring.
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The iShares Ethereum Trust ETF (NASDAQ: ETHA) has become the default way for U.S. investors to gain spot Ethereum exposure in a brokerage account. It holds 100% Ethereum, runs $4.75B in assets, and charges 0.25%. For ETHA holders, the appeal is straightforward: BlackRock custody, tight tracking, no wallet, no keys. What ETHA does not do is anything with the ETH it holds. That coin sits idle. A newer iShares product, the iShares Staked Ethereum Trust ETF (NASDAQ:ETHB), fixes exactly that gap while keeping the wrapper virtually identical.
What ETHA Actually Delivers
A passive spot vehicle is what this is. One share represents a fractional claim on ether held in cold storage by BlackRock’s custodian. Over the past year, the fund is down 41.36%, while spot ETH is down 38.44% over the same period. The gap is roughly the expense ratio plus tracking friction, which is what a well-run spot ETF should look like.
Holders are paying for exposure and convenience. They are not being compensated for the fact that Ethereum, since the Merge, is a proof-of-stake network where validators earn rewards for securing the chain. ETHA’s ether does not stake. Its distribution history is empty, and no yield accrues to the NAV from validator rewards.
The Structural Shortfall
Native ETH staking currently generates a real, protocol-level yield paid in ether. An ETHA holder owns the asset but forfeits that income stream to a fund structure that chose not to stake. For a long-term holder, that is a permanent drag versus a staked alternative, regardless of what ETH’s price does.
ETHB: The Same Fund, Except It Pays
The direct answer from the same issuer is this fund. It is an actively managed iShares spot Ethereum ETF that stakes a portion of its holdings and passes the rewards through as monthly cash distributions. It carries the same 0.25% expense ratio as the passive spot vehicle, holds $499.27M in assets, and reports 80.85% long Ethereum exposure with the balance kept liquid to manage staking unbonding periods and creations or redemptions.
This fund has already begun paying distributions. It went ex-dividend on July 9, 2026, for $0.032059 per share, following a $0.015237 distribution the prior month. The fund reports payments monthly, with an annualized forward figure of $0.384708. At a share price of $22.80, distributions are still building; the trailing yield is 0.21% because only two months of payments are on file. The passive vehicle distributes nothing, this one distributes something, and the delta is staking rewards net of the fund’s staking overhead.
Performance in the Same Market
Over the last month, ETHB returned 6.64% versus ETHA’s 6.36%, with ETH itself up 8.93%. ETHB has less operating history, having traded for roughly 84 trading days, and its 52-week range spans $19.85 to $31.72. The staked version tracks the unstaked version closely on price while layering income on top.
The Tradeoffs Worth Naming
The staking fund is actively managed, not passive. Staked ETH is subject to validator slashing risk and unbonding queues, which is why the fund keeps a liquid buffer rather than staking 100%. Distributions are taxed as ordinary income in a taxable account, unlike the unrealized appreciation inside the passive spot fund. The staking fund is also smaller and younger, so bid-ask spreads and creation flows can be less efficient than those of the larger fund. For readers thinking about broader tax mechanics of crypto ETF income, our Retiree’s Tax Trap Map covers where distribution income complicates otherwise clean portfolios.
Making the Swap
In a tax-advantaged account, the mechanics of switching from ETHA to ETHB are straightforward, with dollar exposure to ether held roughly constant by adjusting share counts for the different prices ($13.37 versus $22.80). In a taxable account, the calculus depends on the embedded gains or losses in ETHA, given that the fund is materially down year to date. Loss harvesting into ETHB is not a wash sale because the two funds have different structures and CUSIPs, though that determination is best made by a tax advisor.
Where This Leaves the Decision
The first remains a clean spot vehicle from the largest issuer in the market. The second is the same wrapper with the yield turned on, at the same fee, from the same shop. For a holder whose goal is long-term ether exposure and who does not need to keep distributions off the tax return, the swap captures income that the incumbent would otherwise structurally forgo. For a holder who prefers a purely passive, non-distributing structure, the first still does what it was bought to do.
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David Beren has been a Flywheel Publishing contributor since 2022. Writing for 24/7 Wall St. since 2023, David loves to write about topics of all shapes and sizes. As a technology expert, David focuses heavily on consumer electronics brands, automobiles, and general technology. He has previously written for LifeWire, formerly About.com. As a part-time freelance writer, David’s “day job” has been working on and leading social media for multiple Fortune 100 brands. David loves the flexibility of this field and its ability to reach customers exactly where they like to spend their time. Additionally, David previously published his own blog, TmoNews.com, which reached 3 million readers in its first year. In addition to freelance and social media work, David loves to spend time with his family and children and relive the glory days of video game consoles by playing any retro game console he can get his hands on.
