BlackRock’s Ethereum Supply Shock: Could a 95% Staking Lockup Send ETH to New Highs?

Ben Graham · February 18

BlackRock has begun seeding its iShares Staked Ethereum Trust (ETHB). The institutional giant is officially expanding into Ethereum’s staking ecosystem!

In a 17 February 2026 SEC filing, a BlackRock affiliate purchased 4,000 seed shares at $25 each, totaling $100,000 in initial capital, to begin acquiring and staking Ethereum tokens.

Is this more than a simple product launch? The move represents BlackRock’s confidence in Ethereum’s long-term infrastructure value and its commitment to capturing yield-generating opportunities in the crypto asset class

The investment giant just filed updated plans for a BlackRock ETH ETF that could eventually lock up a massive portion of its Ethereum holdings. With Coinbase Staking handling the backend, BlackRock expects to pledge anywhere from 70% to 95% of the fund’s assets to the network. This could squeeze the supply of available ETH, potentially sparking a major market reaction.

As we’ve seen with BlackRock’s previous targets, when giants commit resources, they usually expect significant growth.

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Could The Staking Lockup Impact ETH Supply?

Here is how the deal will work. BlackRock and Coinbase will split 18% of the staking rewards as a fee, leaving 82% for the investors. While that fee might sound high, it removes the headache of managing technical validators yourself.

The real headline, however, is the “lockup.” The filing states that under normal conditions, between 70% and 95% of the fund’s Ethereum will be staked. Since staked ETH cannot be immediately sold without an unbonding period, this effectively removes it from the daily trading supply.

Coinbase will act as the prime execution agent. This deepens the tie between traditional finance and crypto-native infrastructure, a trend we are seeing across the board, even as discussions on broader stablecoin regulations stall.

Currently, yields are hovering near 3% annually. While analysts debate if the 18% cut is too steep, the convenience for institutional money is undeniable.

Tokenized real-world assets on Ethereum have surpassed $17B

That’s nearly +300% YoY growth

Stablecoins on mainnet? Over $175B

BlackRock. JPMorgan. Franklin Templeton; they’re all building on Ethereum.

Zooming out

Traditional giants and crypto-heavy investors see… pic.twitter.com/pKjPAoPcYX

— Naga Avan-Nomayo (@JeSuisNaga) February 17, 2026

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Could This Trigger a Liquidity Squeeze?

This brings us to the Ethereum Supply Shock theory. If a monster ETF like BlackRock’s starts locking away 95% of its inflows, the amount of ETH available for everyone else to buy shrinks violently. When demand stays high but supply drops, basic economics suggests prices move upward.

Experts are already adjusting their ETH Price Prediction models based on this potential scarcity. In fact, analysts like Tom Lee have pointed to these exact kinds of supply dynamics as catalysts for major rallies.

However, you should remain cautious. Staking means assets aren’t liquid immediately. If the market crashes and everyone wants out at once, those unbonding periods could cause friction. ETH can get volatile during flash crashes, so understanding these risks is vital.

The SEC still needs to give the final green light on the staking component.

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Key Takeaways

A BlackRock ETH ETF could eventually lock up a massive portion of its Ethereum holdings.

The move represents BlackRock’s confidence in Ethereum’s long-term infrastructure value and its commitment to capturing yield-generating opportunities in the crypto asset class.

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