Fidelity Seeks SEC Approval for Yield-Bearing Ethereum ETF

Fidelity has filed a pre-effective amendment to its registration statement for the Fidelity Ethereum Fund (FETH), which would allow it to stake its spot Ethereum holdings and distribute rewards to investors.

The fund currently tracks the Fidelity Ethereum Reference Rate, adjusted for fees, but with staking, its goal becomes that index plus an amount based on staking rewards.

Fidelity expects the trust to outperform the index before expenses.

Staking is how Ethereum secures its network: holders lock up Ethereum to help validate transactions and earn new tokens in return. The fund would route its ETH through custodians, including Anchorage Digital, BitGo, and Fidelity Digital Assets, to one or more node operators who run the validator infrastructure.

The SEC has already approved spot Ethereum ETFs, but these products did not allow staking; the lack of rewards has been a drawback. Grayscale and BlackRock have also moved to add staking to their ETH funds after a Treasury and IRS safe harbor cleared the path.