Fidelity Integrates Staking Feature into Its Ethereum Spot ETF

In a strategic move, Fidelity Investments has updated its previous application for a spot Ethereum exchange-traded fund (ETF) to now incorporate the innovative staking feature.

This change comes after the Ethereum network transitioned to the Proof of Stake consensus mechanism, where participants who choose to lock their coins are rewarded with ETH, contributing to the security of the network. This inclusion by Fidelity points to an evolution in the way investors can interact with cryptoassets, emphasizing the potential for passive income through staking.

Fidelity does not give up on #Ethereum ETFs and does not give up on the SEC allowing them to Stake within the ETF. Our base case scenario is still that they will not be approved

Fidelity not giving up on #Ethereum ETFs and not giving up on SEC allowing them to Stake within the ETF. Our base case is still that these aren’t gonna be approved https://t.co/6ynFvBrvoo pic.twitter.com/yxSLsBbi2C

— James Seyffart (@JSeyff) March 18, 2024

Meanwhile, the US Securities and Exchange Commission (SEC) postponed its decision on a spot ether (ETH) ETF, a joint project between Invesco and Galaxy Digital, in early February. This postponement did not surprise market watchers, including Bloomberg Intelligence analyst James Seyffart, given the SEC’s recent history of postponing similar decisions. The proposal in question aims to provide institutional investors with more direct access to ether, diverging from traditional investing through ether futures on the Chicago Mercantile Exchange (CME), one of the few regulated avenues available to US investors in Ethereum.

This move by Fidelity highlights a growing trend among financial giants to explore and offer cryptocurrency investment products, reflecting the growing acceptance of Ethereum and other cryptocurrencies as legitimate asset classes. The initiative also underscores continued innovation in the cryptoasset space, offering investors alternative and potentially more profitable methods to invest in cryptocurrencies, beyond the traditional direct purchase or investment in futures.

Furthermore, the SEC postponed decisions on similar proposals from other market players, such as Grayscale Investments and BlackRock, signaling a cautious regulatory environment, but possibly open to new cryptocurrency investment product structures.

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The views and opinions expressed by the author, or anyone mentioned in this article, are for informational purposes only and do not constitute financial, investment or other advice. Investing in or trading cryptocurrencies carries a risk of financial loss.