Fidelity includes staking in Ethereum-ETF: a new round of yield for institutional investors
A major step for the U.S. crypto-ETF market: asset manager Fidelity has officially announced the integration of staking into its Ethereum exchange-traded product (FETH). This decision marks a significant shift in how traditional financial giants perceive digital assets and opens up new horizons for passive income for investors.
According to updated registration documents filed with the U.S. Securities and Exchange Commission (SEC), the FETH fund, which holds a solid $898 million in net assets, will be able to allocate up to 100% of its ETH reserves to staking. Notably, the fund's management did not set a minimum threshold for this operation, underscoring their confidence in the mechanism.
Mechanics and economics of staking
The process will be organized through custodians, who will send ether into staking, leaving only the necessary reserve to cover operating expenses and redemptions. The entire architecture is meticulously designed: a management fee of 0.25% of assets is charged for fund administration, while staking yields will become a pleasant bonus for investors on top of ether's price dynamics.
Key economic parameter: 85% of gross staking income will remain in the fund, distributed among shareholders. The remaining 15% will go to compensate operators and intermediaries, including well-known players such as Blockdaemon, Figment, and Galaxy. These payments will be made quarterly in cash, adding to the product's appeal for conservative investors.
Regulatory green light and competition
It is worth noting that this step became possible after an important clarification from the U.S. Internal Revenue Service (IRS), published in November 2025. The new procedure (Rev. Proc. 2025-31) created a protective mechanism allowing qualified crypto funds to engage in staking without losing their tax status. This removed the last legal barriers for major players.
Fidelity joins Grayscale and 21Shares, which have already integrated staking into their Ethereum products. Notably, BlackRock chose a different path, launching a separate staking instrument rather than modifying its existing ETF. Two approaches have emerged in the market: evolutionary (improving current products) and revolutionary (creating new ones).
Expert opinion: Integrating staking into spot ETFs is not just adding functionality, but a fundamental change in Ethereum's investment appeal as an asset. Now institutional holders receive not only the speculative component but also real cash flow, bringing cryptocurrency closer to traditional income-generating instruments. This step will likely accelerate capital inflows into ETH products and serve as another argument for the market's maturity. However, investors should carefully monitor income distribution terms and potential risks associated with asset lock-up in staking.