BlackRock has cut its Ethereum ETF staking fee from 18% to 10% to stay competitive as institutional staking demand rises. While a record 37 million ETH is now staked, trading firm Culper Research warns that recent network upgrades have lowered validator yields, potentially reversing demand and harming ETH’s value. Ethereum’s price is currently consolidating near $2,000.
BlackRock significantly lowered the staking fee for its Ethereum ETF, according to Bloomberg ETF analyst James Seyffart. The world’s largest asset manager reduced its fee from 18% to 10% in an amended filing. Most U.S. spot ETH ETF issuers have applied to add staking features, with some like Grayscale already distributing rewards.
The amount of staked ETH recently hit 37 million tokens, representing over 30% of the circulating supply. This demand was reinforced when the validator entry queue surpassed the exit queue late in 2025, with over 3 million ETH waiting to enter the system. However, Culper Research issued a warning about the sustainability of this demand.
The trading firm stated that recent network upgrades like Fusaka have lowered validator tips and contracted overall yield. “Lower yields decrease demand for staking and high-value activity, undermining institutional adoption. The flywheel is now running in reverse,” Culper Research claimed. The firm cited a decline in active validators as a sign of a crisis in the staking segment, prompting it to go short on ETH.
A key data point to validate this thesis would be if the validator exit queue surpasses the entry queue. Conversely, Ethereum co-founder Vitalik Buterin views the recent and planned upgrades as net positive for builders and institutions. Buterin is positive that upcoming upgrades will reduce the overall cost of running validators.
It remains to be seen how institutional investors will react to these upgrades in the long run. Meanwhile, ETH’s price has been consolidating tightly near $2,000, with technical indicators hinting at a potential volatile breakout. Whether it will be a bearish or a bullish breakout will be determined by the broader macro environment and ongoing geopolitical tensions.
