Fidelity has filed with the US Securities and Exchange Commission (SEC) to add staking to its Fidelity Ethereum Fund (FETH), which manages more than $898 million in net assets.
The proposed change would allow the spot Ethereum exchange-traded fund to generate staking rewards from its ETH holdings.
If approved, FETH could stake almost its entire portfolio under normal conditions, excluding assets reserved for redemptions, expenses and liquidity requirements.
The filing represents the latest effort by a major asset manager to incorporate Ethereum’s native yield into a regulated investment product.
FETH could stake nearly all its Ethereum holdings
Fidelity said the fund would not be subject to a minimum staking requirement. The percentage of ETH staked would instead depend on the ETF’s liquidity, redemption and operational needs.
The fund plans to conduct staking through its custodians, including Anchorage Digital Bank, BitGo Bank and Fidelity Digital Assets.
These providers would support the staking process while helping the fund maintain sufficient liquidity to meet investor redemptions and other obligations.
Staking involves locking ETH to support Ethereum’s proof-of-stake network. In return, validators receive rewards for processing transactions and maintaining network security.
However, the activity carries risks such as slashing penalties, technical failures, delayed withdrawals, and fluctuating reward rates.
Under the proposed structure, FETH would retain 85% of the gross rewards generated through staking.
The remaining 15% would be treated as staking fees and divided among the fund’s sponsor, custodians, and node operators.
Net staking rewards would first be used to cover the ETF’s expenses. Any remaining amount would then be distributed to investors in cash on a quarterly basis, following IRS Revenue Procedure 2025-31.
The structure could provide shareholders with income from Ethereum staking without requiring them to manage wallets, validators or private keys directly.
However, final returns would depend on Ethereum’s staking yield, the percentage of the portfolio staked, fund expenses and fees charged by the service providers.
US spot Ethereum ETFs recorded net outflows totaling $16.3 million on Monday and Tuesday.
However, the funds recorded an inflow of $7.38 million on Wednesday, led by BlackRock’s ETHA.
Ethereum ETFs collectively held approximately $10.48 billion in net assets. Adding staking could make FETH more attractive to investors by introducing a potential income component.
However, the proposed amendment remains subject to SEC approval.
Ethereum consolidates below the 100-day EMA
The ETH/USD 4-hour chart remains bullish and efficient despite the current choppy price action.
On the 4-hour chart, ETH is trading around the 20-day EMA of $,1884 but above the 50-day EMA of $1,864. Holding above these levels suggests a mildly constructive short-term outlook.
However, the cryptocurrency continues to face resistance at the 100-day EMA near $1,922.
Momentum indicators remain neutral. The Relative Strength Index stands near 47, approaching the neutral level, while the MACD lines are set to cross into the bullish zone.
A sustained move above the 100-day EMA could allow ETH to challenge the horizontal resistance level at $1,961.
If buyers clear that barrier, the next major upside targets are located around $2,172 and $2,431.
On the downside, the 20-day and 50-day EMAs provide immediate support. A break below those moving averages could send ETH toward $1,809, followed by $1,701.
In the event of a deeper market correction, additional support may emerge near $1,507 and $1,415.
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