Fidelity Drops Staking Plans in Updated Ether ETF Filing

Annualized yields on ether staking are nearly 3% as of Tuesday, data from popular staking service Lido shows.

After a recent filing from the U.S. Securities and Exchange Commission (SEC), several aspiring ether exchange-traded fund (ETF) exchanges were asked to update 19b-4 filings. One key update from the filings showed that Fidelity has dropped plans to stake ether (ETH) holdings in its proposed spot ETF.

An S-1 update filed early Tuesday showed that Fidelity has rolled back plans to stake ether (ETH) holdings in its proposed spot exchange-traded fund (ETF). The update was filed with the U.S. Securities and Exchange Commission. In previous filings, the firm said it intended to “stake a portion of the trust’s assets” to “one or more” infrastructure providers. However, it clearly stated in Tuesday’s update that it would “not stake the ether” stored with the custodian.

Staking is the process of locking certain cryptocurrencies for a set period of time to help support the operation of a blockchain, in turn, for a reward. These rewards are largely considered passive income among crypto traders. Annualized yields on ether staking were nearly 3% as of Tuesday, data from popular staking service Lido shows.

CoinDesk reported on Monday that the SEC asked aspiring ether ETF exchanges to update 19b-4 filings ahead of a key deadline this week – boosting expectations of an ETH ETF.

The SEC has yet to approve a spot ETF for ether, despite approving several futures-based ether ETFs in 2021. ProShares launched the first ether futures ETF in April of last year, and it quickly gathered over $1 billion in trading volume on its first day. Several other ether futures ETFs were launched in the following months.

Several applications for ether spot ETFs were filed with the SEC in 2022, but the agency has yet to make a decision on any of them. The SEC has the authority to delay decisions on ETF applications for up to 240 days, and it has used this authority several times in the past.

If approved, a spot ether ETF would allow investors to gain exposure to the price of ether without having to purchase and store the cryptocurrency themselves. This could make it easier for a wider range of investors to participate in the cryptocurrency market.