Key Points
- Fidelity has proposed staking a portion of the Ether in its proposed Ether exchange-traded fund (ETF).
- The firm is one of eight currently waiting for approval from the SEC to launch an Ether ETF.
Fidelity, a financial services giant, is looking to stake a part of the Ether (ETH) held by its proposed spot Ether exchange-traded fund (ETF) to generate additional income for investors.
On March 18, Fidelity submitted a 19b-4 amendment to the United States Securities and Exchange Commission. If the ETF gets the green light, the fund plans to stake an undisclosed amount of its assets via one or more trusted staking providers.
Staking Providers
The company did not specify which staking provider it would use. Several Ether staking providers operate in the market today, such as Lido DAO, RocketPool, and StakeWise.
The price of Lido DAO, the largest liquid Ethereum staking provider, briefly rose 6% from $2.48 to $2.56 upon the news, before reverting to $2.49. However, Lido DAO has seen a 27% drop in the last week, in line with a broader pullback for Ether and many tokens within its ecosystem.
ETF Race
Fidelity is among eight fund issuers that have submitted an Ether ETF application, all of which are currently awaiting SEC approval. Ark 21Shares also revealed plans to stake a portion of its proposed fund’s ETH on Feb. 8. Shortly afterward, Franklin Templeton joined the spot Ether ETF competition, also intending to stake a part of the ETF’s Ether to generate extra income.
Other firms in the running include the world’s largest investment firm BlackRock, Cathie Wood’s ARK Invest, and crypto asset manager Grayscale. If the SEC does not approve all eight ETFs by Van Eck’s final deadline on May 23, all prospective issuers will have to refile their applications at a later date.
According to Bloomberg ETF analyst Eric Balchunas, the chances of a spot Ether ETF approval by Van Eck’s deadline in May are just 35%. In January, Balchunas estimated the approval odds at 70%, but he noted that the SEC’s lack of communication with prospective fund issuers and political backlash against Chair Gary Gensler were negative indicators for the approval process.
