The crypto world is no stranger to volatility, but few narratives have drawn as much scrutiny lately as Ethereum’s underperformance relative to Bitcoin. While the broader digital asset market surged following macroeconomic shifts in late 2024, Ethereum failed to reach new all-time highs—prompting skepticism among investors and analysts alike. However, Robbie Mitchnick, BlackRock’s head of digital assets, believes the pessimism surrounding Ethereum is overdone and that the blockchain remains a foundational pillar for the future of tokenized finance.
Speaking at Blockworks’ Digital Asset Summit in New York, Mitchnick expressed strong confidence in Ethereum’s long-term value proposition. “There’s a lot to be optimistic about,” he said, reinforcing BlackRock’s strategic commitment to the network.
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Why Ethereum Still Matters
Despite recent price struggles—with Ether trading below $2,000 for the first time since late 2023—Ethereum continues to serve as the backbone for many of the most innovative applications in decentralized finance (DeFi), non-fungible tokens (NFTs), and real-world asset tokenization.
Mitchnick pointed to BUIDL, BlackRock’s tokenized U.S. Treasury fund built on Ethereum, which recently surpassed $1 billion in assets under management. This milestone underscores the firm’s belief in Ethereum as the preferred infrastructure for institutional-grade blockchain solutions.
“When you look at our experience, take BUIDL as an example, there was no question that the blockchain we would start our tokenisation on would be Ethereum.”
This decision wasn’t made lightly. BlackRock initially experimented with a private, internal blockchain in 2020. But according to Mitchnick, early learnings quickly revealed that public blockchains—especially Ethereum—offered superior transparency, security, and developer momentum.
“That decision appears to have been the right one,” he noted.
The Rise of Ethereum ETFs
BlackRock’s influence in financial markets is unmatched. With over $10 trillion in assets under management, its entry into crypto has consistently shifted market dynamics. After launching the iShares Bitcoin Trust (IBIT) in January 2024—a move widely credited with legitimizing crypto ETFs—the firm introduced its Ethereum ETF, ETHA, in July.
While ETHA hasn’t matched the explosive inflows seen by Bitcoin ETFs, Mitchnick argues that this comparison is misleading. He highlighted that ETHA attracted $6 billion in inflows within its first six months, a figure that places it among the most successful ETF launches in history when benchmarked against the broader ETF universe.
“There’s a bit of a misconception out there that ETH ETFs have been meh.”
He acknowledged that side-by-side comparisons with IBIT create an unfair narrative. Bitcoin ETFs benefited from being first movers in a historic regulatory shift. Ethereum ETFs, while slightly slower out of the gate, are performing strongly by traditional financial standards.
Staking: The Missing Piece
One key differentiator between Bitcoin and Ethereum lies in their consensus mechanisms. Unlike Bitcoin’s proof-of-work model, Ethereum operates on proof-of-stake—a system where holders can earn yield by staking their Ether to help secure the network.
Currently, most Ethereum ETFs do not support staking, meaning billions of dollars worth of Ether sit idle instead of generating returns. Mitchnick believes unlocking staking functionality represents the next phase of evolution for Ethereum-based ETFs.
“Staking yield is a meaningful part of how you can generate investment return in this space,” he said. “It’s less perfect for ETH today without staking.”
Efforts are already underway. In February 2025, NYSE Arca filed a proposed rule change to allow Grayscale’s Ethereum Trust (ETHE) and Ethereum Mini Trust (EZET) to begin staking. If approved, this could set a precedent for other issuers—including BlackRock—to follow suit.
Industry leaders like Jito Labs and Multicoin Capital have submitted statements to the SEC Crypto Task Force arguing that enabling staking improves investor outcomes and strengthens network security.
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Addressing Ethereum’s Challenges
Ethereum has faced growing internal pressure amid its price slump and developer debates over governance and scalability. Some prominent voices within the ecosystem have called for restructuring at the Ethereum Foundation, while others question whether layer-2 rollups are diluting the core protocol’s value.
Yet Mitchnick remains unfazed by these growing pains. He views them as natural phases in the maturation of any transformative technology.
The real metric of success, he argues, isn’t short-term price action but adoption by institutions and builders. And by that measure, Ethereum is winning.
From central bank pilots using Ethereum-compatible protocols to global asset managers launching tokenized funds on its network, the ecosystem continues to expand.
FAQ: Understanding Ethereum ETFs and Staking
Q: Why aren’t Ethereum ETFs performing as well as Bitcoin ETFs?
A: While Bitcoin ETFs had a first-mover advantage and captured massive initial demand, Ethereum ETFs are still performing strongly by historical financial standards. ETHA’s $6 billion in early inflows demonstrate solid institutional interest.
Q: What is staking, and why does it matter for ETFs?
A: Staking allows ETH holders to earn yield by helping validate transactions on the network. Enabling staking in ETFs would provide investors with passive income, making these products more competitive and aligned with native crypto economics.
Q: Is BlackRock planning to add staking to its Ethereum ETF?
A: While no official announcement has been made, Mitchnick confirmed that staking represents a logical next step—if regulatory approval is granted.
Q: Can Ethereum recover its momentum?
A: Yes. Despite short-term headwinds, Ethereum maintains dominance in DeFi, NFTs, and asset tokenization. Institutional adoption through products like BUIDL signals strong long-term confidence.
Q: How does tokenization benefit from Ethereum?
A: Ethereum offers robust smart contract capabilities, high security, and a mature developer community—making it ideal for issuing tokenized versions of real-world assets like bonds, equities, and commodities.
Q: Are Ethereum ETFs safe for retail investors?
A: Like all investment products, they carry risk. However, ETFs provide regulated exposure without requiring direct ownership or custody of crypto—making them a safer entry point than exchanges or wallets.
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Looking Ahead: The Next Phase of Crypto Adoption
Mitchnick closed his remarks with a forward-looking perspective: “There’s obviously a next phase.”
That phase includes broader adoption of tokenized assets, deeper integration of staking yields into regulated products, and continued innovation on public blockchains—especially Ethereum.
For skeptics focused solely on price charts, Ethereum may seem stagnant. But for institutions building real financial infrastructure on-chain, it remains the platform of choice.
As regulatory clarity improves and technical upgrades continue, Ethereum is poised not just for recovery—but for reinvention.
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