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Fidelity Investments Amends Ethereum ETF Application to Include Staking Feature
Fidelity Investments has recently made a significant amendment to its application for an Ethereum spot exchange-traded fund (ETF) by including a staking feature, as detailed in a regulatory filing submitted to the US SEC on March 18. The introduction of staking activities within the ETF has captured the attention of industry insiders and analysts, although opinions on this development vary.
The incorporation of a staking feature in the ETF application aligns with Ethereum’s transition to a Proof of Stake (PoS) model, where participants lock up digital assets to support network security and operations in exchange for rewards in the form of additional crypto. This move by Fidelity aims to explore the income-generating potential of staking within a regulated financial product framework.
According to the regulatory document, the ETF may engage in staking activities through designated providers, potentially including affiliates of Fidelity. The document states, “In consideration for any staking activity in which the Fund may engage, the Fund would receive certain network rewards of ether tokens, which may be treated as income to the Fund as compensation for services provided.”
SEC’s Stance and Market Sentiment
The US SEC has historically approached crypto-related financial products with caution and has yet to make a decision on Ethereum ETF applications. While market experts initially displayed optimism towards the approval, the odds have since been revised to approximately 35%.
Bloomberg analyst James Seyffart remains doubtful about the SEC’s willingness to approve an Ethereum ETF and noted that the recent amendment has not significantly altered the outlook for approval, which remains unfavorable. He commented, “To be clear — I don’t think they *should* be denied. But at this point I think they will be.”
On the other hand, former Yahoo Finance reporter Zack Guzmán suggested that Fidelity’s decision to include staking in its ETF application could be either a strategic move to align with the SEC’s expectations or a potential point of contention that might complicate the approval process.
As the SEC reviews Fidelity’s amended application, the outcome could establish a precedent for future crypto ETFs seeking to integrate staking or other native blockchain functionalities. Investors, regulatory bodies, and the digital assets community are closely monitoring this decision, recognizing its potential to shape the convergence of traditional financial products and innovative digital assets in the market landscape.
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