Fidelity Investments is preparing to add staking to its spot Ether exchange traded fund, according to a filing submitted to the US Securities and Exchange Commission on Tuesday. The move targets the Fidelity Ethereum Fund, known by its ticker FETH.
Under the plan, the fund could stake up to 100% of its Ether holdings during normal conditions. Fidelity carves out an exception for coins needed to cover redemptions, ongoing expenses and day to day liquidity needs.
The staking structure splits rewards between the fund and its operator. Fidelity would keep 85% of staking rewards for the fund, passing the remaining 15% toward staking fees.
Investors could see a direct cash benefit from the change. Fidelity plans quarterly cash distributions tied to the staking income, though the firm stresses payouts are not guaranteed.
Timing on the rollout remains loose for now. Fidelity expects staking to begin as soon as practicable once the prospectus takes effect. The preliminary version of that prospectus can still change before it becomes official.
The filing addresses a gap that has drawn criticism from market watchers. One analyst argued in May that FETH’s lack of staking left it at a competitive disadvantage against staking enabled rivals from Grayscale and BlackRock.
Those competitors have already built staking into their Ether products, letting holders earn yield on top of price exposure. Fidelity’s filing suggests the firm wants to close that gap before it costs the fund more market share.
Spot Ether ETFs launched without staking due to earlier regulatory caution around the practice. Momentum has since shifted, with issuers increasingly viewing staking rewards as a standard feature rather than an optional add on.
The SEC has not yet approved the amended structure. Fidelity’s filing joins a broader wave of asset managers pushing to make staking a routine part of crypto fund products through 2026.
For now, FETH continues operating without staking while the review plays out. Any approval would bring the fund in line with staking enabled products already trading from larger competitors.
