Fidelity wants to integrate staking into its Ethereum ETF. A potential game changer for institutional investors and the ETH price.
Cboe submitted a rule change proposal on Tuesday that would allow Fidelity Investments’ spot Ethereum ETF to offer staking.
If approved, the FETH fund could stake “part or all of the trust’s Ether holdings through one or more trusted staking providers.” The rewards earned through staking would be “treated as income,” the filing with the SEC continues.
Ethereum investors have been waiting for the launch of staking ETFs for some time. They hope that these will bring new inflows from institutional investors and thus new impetus for the ETH price.
After the crypto sell-off on Monday, the price fell below the $2,000 mark for the first time since 2023.
The Ethereum ETFs launched last year could not keep up with the success of the Bitcoin ETFs. All ETH ETFs currently hold just $6.6 billion compared to $88.1 billion for Bitcoin ETFs.
One reason for this seems to be the lack of selling point for a simple buy-and-hold ETF on ETH. While Bitcoin acts as a store of value, ETH can be optimally used on-chain as a productive asset in various DeFi protocols.
The idea is that introducing a passive return of two to four percent through staking rewards could significantly increase the appeal of ETFs for institutional investors.
Fidelity’s FETH ETF is currently the second largest Ether fund by assets under management (AUM). Grayscale and 21Shares are also aiming to integrate staking into their Ethereum ETFs.
Image by WorldSpectrum from Pixabay
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