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Amid the ongoing market downturn, some asset managers have started thinking creatively. Notably, Fidelity Investments has made a significant move that could redefine the Ethereum ETF market.
"Second attempt" at staking approval
In a bold move, Fidelity has filed to add a "staking" option to its Ethereum ETF product. Its exchange partner, CBOE, submitted the filing to the U.S. Securities and Exchange Commission (SEC). If the regulator approves, Fidelity could begin staking activities for its crypto-based fund as early as this year.
Godfrey BenjaminThis staking push represents part of the broader push by Ethereum ETF issuers to make staking accessible to investors. The regulatory body's approval would signal a significant shift in the U.S. policy direction regarding the crypto sector.
Major changes occurred within approximately two months of the new U.S. administration. Notably, there has been a deliberate tilt toward crypto assets, with the U.S. establishing a strategic Bitcoin Reserve.
Interestingly, before the SEC approved the spot Ethereum ETF in May 2024 and eventual trading in July, Fidelity had to amend its filing. Fidelity and Grayscale Investments amended their S-1 registration statement to exclude staking language.
The move prevented the then-Gary Gensler-led SEC from classifying the ETF as a security under the Howey Test. That hurdle prevented asset managers from offering staking rewards to investors.
Regulatory decision could reshape crypto ETFs
Analysts say it would be interesting to see what the SEC decides under this new administration, which has adopted a crypto-friendly stance over the past two months.
It is worth noting that the New York Stock Exchange (NYSE) filed similarly with the SEC on behalf of Grayscale earlier in February. It sought approval to allow staking in its Grayscale Ethereum Trust ETF (ETHE) and Grayscale Ethereum Mini Trust ETF (ETH).
Alex DovbnyaAlthough the regulatory body acknowledged the filings, it has not approved them. The SEC has even advanced the decision on a similar product, BlackRock's Ethereum ETF options.
However, the proposals remain under review, and a favorable decision would signal a major shift in policy.
Dan Burgin
Vladislav Sopov