Fidelity has Amended Spot ETH ETF to Include ETH Staking

Fidelity Investments, a renowned financial services giant, is venturing into the realm of Ether staking, seeking approval to stake a portion of the ETH held by its proposed spot Ether exchange-traded fund (ETF). 

This move aims to provide investors with an additional income stream, as disclosed in a 19b-4 amendment filed with the United States Securities and Exchange Commission (SEC) on March 18.

As reported earlier by TheCoinRise, the applications for spot ETH ETF by Fidelity was postponed by the SEC and the agency stated that it needed more time to discuss the same.

Fidelity Amends Spot BTC ETF

In the amended application, Fidelity outlined its intention to stake a portion of the ETF’s assets through trusted staking providers, though the specific provider was not disclosed. Notably, the market boasts several Ether staking providers, including prominent names like Lido DAO, RocketPool, and StakeWise.

Upon news of Fidelity’s initiative, the price of Lido DAO, the largest liquid Ethereum staking provider, experienced a momentary surge of 6%, demonstrating the market’s response to developments in the ETF landscape. However, recent weeks have seen a downturn for Lido DAO and other assets within the Ethereum ecosystem, reflecting broader market trends.

Fidelity Awaits Approval of Spot ETF Applications

Fidelity is among eight fund issuers awaiting SEC approval for their Ether ETF applications. The competition in this space is intensifying, with firms like Ark 21Shares and Franklin Templeton also incorporating plans to stake a portion of their proposed funds’ Ether to generate additional income.

The SEC’s approval timeline adds an element of uncertainty to the equation. With a final deadline set by Van Eck for May 23, the likelihood of approval for spot Ether ETFs remains uncertain. Bloomberg ETF analyst Eric Balchunas estimates the probability of approval by the deadline at just 35%, highlighting the regulatory hurdles faced by prospective fund issuers.

Challenges in Spot BTC ETF

The approval process for Ether ETFs has been marked by various challenges, including regulatory ambiguity and political dynamics within the SEC. Despite initial optimism in January, recent developments have raised concerns among industry observers, with Balchunas citing the SEC’s lack of communication with fund issuers and potential political resistance as factors dampening approval prospects.

As the cryptocurrency market continues to evolve, the fate of Ether ETFs hangs in the balance, awaiting regulatory clarity and investor confidence. Fidelity’s foray into staking underscores the growing interest from traditional financial institutions in harnessing the potential of digital assets to generate returns for investors.