Fidelity Spot Ethereum ETF Proposed To Enable ETH Staking As Deadline Approaches

Key Points:

• Fidelity spot Ethereum ETF is being proposed with SEC offering investors option to stake assets, tapping into Ethereum’s PoS model.
• The deadline for ETF applications is set for May 23 amid regulatory concerns.

Fidelity, a leading asset management firm, has submitted a revised proposal to the US Securities and Exchange Commission (SEC) concerning its Ethereum exchange-traded fund (ETF) application.

Fidelity Spot Ethereum ETF Advanced Proposal with Staking Option

This amendment introduces the option for potential investors to stake their Ethereum (ETH) assets within the fund, as outlined in the filing made on March 18.

Staking, a crucial function of Ethereum’s Proof of Stake (PoS) model, involves participants locking up digital assets to support the network in exchange for rewards. Fidelity’s move aims to tap into the income-generating potential of staking within a regulated financial product.

The amended proposal allows the Fidelity spot Ethereum ETF to allocate a portion of its holdings for staking through designated providers, potentially including affiliates of Fidelity. If engaged in staking activities, the fund would receive network rewards in the form of ether tokens, treated as income for services provided.

SEC’s Stance on Crypto ETFs Remains Ambiguous

This development has stirred significant interest in the industry, particularly as it comes amidst US politicians’ recent concerns over crypto-related ETFs and their potential risks to retail investors.

The SEC now has up to 90 days to respond to Fidelity spot Ethereum ETF amendment, with the official deadline for Fidelity’s application, along with BlackRock‘s, set for May 23. The SEC’s historically cautious stance on crypto-related financial products adds anticipation to the decision, with experts revising the odds of approval to approximately 35%.

Currently, Ethereum’s staking sector boasts $48 billion, with Lido Finance holding over 70% of the market share, or $35 billion.