Fidelity Incorporates Staking in Spot Ethereum ETF Proposal

Asset management firm Fidelity Investments has made amendments to its proposal for launching an exchange-traded fund based on the spot price of Ethereum, including a provision for staking.

“According to the registration statement, the sponsor may, from time to time, place a portion of the fund’s assets through one or more trusted staking providers, which may include an affiliate,” the firm noted in the amendment.

Locking assets is expected to yield “certain network rewards,” the company added.

The cumulative volume of Ethereum assets staked amounts to 31.68 million ETH ($0.99 billion), according to The Block.

In terms of protocols, the liquid staking platform Lido holds a 30% market share. The centralized crypto exchange service Coinbase accounts for 14%.

Analysts at S&P Global Ratings consider it unlikely that Ethereum ETF issuers will choose a DeFi platform’s offering. They are more likely to opt for a licensed custodian like Coinbase.

The largest American crypto exchange acts as a custodian for eight of the 11 approved spot Bitcoin ETFs in the US. However, Fidelity uses its own subsidiary for these services.

At the time of writing, the firm’s exchange product holds approximately 132,570 BTC valued at around $8.9 billion.

In early March, the US Securities and Exchange Commission (SEC) postponed its decision on spot Ethereum ETF applications from BlackRock and Fidelity.

Following a request from senators to SEC Chairman Gary Gensler regarding the undesirability of expanding the range of exchange-traded crypto products, experts sharply lowered their expectations regarding the approval of new ether-based funds.