The Chicago Board Options Exchange (Cboe) has submitted a proposal to the U.S. Securities and Exchange Commission (SEC) seeking approval to introduce staking for the Fidelity Ethereum ETF (FETH).
The filing, made on March 11, aims to allow the fund to stake its Ethereum holdings, potentially boosting returns for investors. If approved, this move would represent a significant step in integrating staking into regulated investment vehicles.
Staking, a process where ETH is locked to help secure the Ethereum network while earning rewards, could provide an additional income stream for investors beyond traditional spot Ethereum ETFs.
The filing highlights several advantages of staking, including improved investor returns and enhanced efficiency in the fund’s creation and redemption process.
According to the 19b-4 form submitted to the SEC, Cboe BZX Exchange proposed amendments that would permit the Fidelity Ethereum Fund to stake its ether holdings.
The development is part of a broader industry push by Ethereum ETF issuers to make staking more accessible to investors. Regulatory approval could signal a policy shift in the U.S. crypto market, especially amid evolving attitudes toward digital assets.
The move also comes after major changes in the U.S. administration’s approach to cryptocurrencies, including the establishment of a strategic Bitcoin reserve.
Strong Investor Demand for Ethereum ETF Staking
Fidelity Investments originally filed for its spot Ethereum ETF in November 2023 to provide investors with direct exposure to ETH without requiring direct ownership.
The SEC approved the ETF in May 2024, alongside similar offerings from other asset managers, leading to its official launch in July 2024. Since then, the Fidelity Ethereum ETF has attracted strong investor interest, accumulating approximately $1.45 billion in net inflows.
However, the fund has faced challenges due to the SEC’s prior stance on staking. When the SEC approved Ethereum ETFs in May 2024, it required issuers to exclude staking provisions from their filings.
The restriction prevented asset managers from offering staking rewards, resulting in estimated annual yield losses of around 3% for these funds.
The regulatory landscape started shifting in early 2025. In February, the SEC acknowledged a proposal from NYSE Arca that sought to amend regulations and allow staking for Grayscale’s Ethereum ETF.
| Disclaimer: This website provides information only and is not financial advice. Cryptocurrency investments are risky. We do not guarantee accuracy and are not liable for losses. Conduct your own research before investing. |
