Fidelity integrates staking into Ethereum ETF: a new stage of institutional adoption
American financial giant Fidelity has taken an important step in the evolution of crypto investment products by submitting an updated registration form to the U.S. Securities and Exchange Commission (SEC) for its spot Ethereum fund, FETH. The key change is the inclusion of a staking mechanism, which opens new horizons for institutional investor returns.
According to the submitted terms, the fund will have full flexibility in managing its assets: in normal operation, it will be able to allocate up to 100% of its portfolio to the Ethereum network. This model allows for maximizing potential profits from validation, but at the same time requires careful management of risks associated with network volatility and potential slashing penalties.
The distribution of rewards is structured under a transparent scheme: 85% of staking income will go directly to the fund, while the remaining 15% will be distributed among sponsors, custodial services, and node operators. This is standard industry practice, but it is important to note that after deducting all operational costs, net income is planned to be paid to shareholders quarterly in U.S. dollar equivalent.
This decision marks a significant shift in the approach to Ethereum ETFs in the U.S. market. Previously, the SEC blocked the inclusion of staking in such products, citing regulatory uncertainty. Now, with the changing political climate in Washington and growing competition among issuers, we are witnessing gradual liberalization.
From my point of view, this is not just a technical update, but a strategic signal to the market. Staking adds an additional return of 3-5% per annum to the base exposure to ether, making FETH significantly more attractive to institutions focused on long-term holding. If the SEC approves this modification, other issuers, such as BlackRock and Grayscale, will be forced to follow suit in order not to lose their competitive edge. This will become a powerful catalyst for the growth of institutional demand for Ethereum and will strengthen its status as a yield-generating asset.