One of the largest asset management companies in the U.S., BlackRock, has taken a significant step toward the Ethereum market. The company has submitted an application to the U.S. Securities and Exchange Commission (SEC) for a spot ETF product called iShares Ethereum Trust, which includes “in-kind” transactions—i.e., transactions conducted directly with Ethereum.
With this application, investors in BlackRock’s ETF would be able to buy and sell shares using Ethereum instead of cash. This has the potential to improve both transaction efficiency and tax advantages for investors.
What Is “In-Kind Redemption” and Why Is It Important?
“In-kind redemption” refers to a system where ETF investors can use crypto assets (in this case, Ethereum) instead of cash to buy or sell ETF shares. That means an investor can give ETH to receive ETF shares, or redeem ETF shares in exchange for ETH.
The advantages of this system for investors include:
- Lower transaction costs
- Reduced tax burden (since it's a direct asset swap)
- ETF prices closer to Ethereum's actual market value
This approach had previously been applied successfully with BlackRock’s Bitcoin ETF, and a similar impact is now expected for Ethereum.
SEC Decision Expected in November
BlackRock’s application has not yet been approved. The SEC is expected to issue a final decision by November 10, 2025. If approved, this could mark a historic milestone for Ethereum.
Additionally, reports indicate that BlackRock is in discussions with the SEC to include Ethereum staking (i.e., earning income through proof-of-stake) in the ETF. This feature would allow investors to earn passive income through their ETF shares. However, staking is subject to a more complex regulatory process.
Is the Institutional Ethereum Era Beginning?
This application is more than just a technical detail. It signals a deeper shift: Institutional investors are now showing significant interest in Ethereum—not just Bitcoin. The fact that a giant like BlackRock is working systematically on Ethereum products suggests that the market is maturing.
Possible implications of this development include:
- Medium-term upward price expectations for Ethereum
- Diversification of ETFs and expansion of the investor base
- Greater integration of Ethereum into traditional finance
BlackRock’s in-kind transaction filing for its spot Ethereum ETF signals a structural transformation in the crypto markets. If approved by the SEC, Ethereum—like Bitcoin—could become a mainstay in institutional portfolios. At the same time, it would open the door to a more efficient, transparent, and low-cost investment product for investors.
Institutionalization in the crypto world is growing step by step. In this new era, Ethereum is set to become highly visible—not just through its technological foundation, but as a financial product as well.
