Asset management company Fidelity wants traders of its proposed ethereum spot exchange-traded fund (ETF) to be able to stake their assets upon approval of the product.
The financial giant including the request in an amendment to its Nov. 17 application to launch an ethereum spot ETF in the United States.
Fidelity includes bets in ETF proposal
According to a 19b-4 amendment filed with the United States Securities and Exchange Commission (SEC) on March 18, Fidelity intends to stake a portion of the assets of its ethereum spot ETF to receive rewards and generate additional income For the users.
“In accordance with the Registration Statement, the Sponsor may, from time to time, stake a portion of the assets of the Fund through one or more trusted betting providers, which may include an affiliate of the Sponsor,” the firm stated.
Staking refers to the active participation of cryptocurrency users in the operations of a proof-of-stake blockchain by locking their assets for a set period to assist in transaction validation. The ethereum network has several staking providers, including StakeWise, Lido DAO, and RocketPool. crypto exchanges like Binance, Coinbase, and Kraken also offer staking services.
“In consideration for any staking activities in which the Fund may engage, the Fund would receive certain network rewards in the form of ether tokens, which may be treated as income to the Fund as compensation for services provided,” Fidelity added.
CoinGecko Data sample LDO, the native token of Lido DAO, ethereum's largest staking provider, reacted to the news, briefly rising 6% from $2.48 to $2.56 before returning to $2.49. At the time of writing, the cryptocurrency was trading at $2.32, down 14% in the last 24 hours.
Low Chances of ethereum ETF Approval
While the crypto community anticipates the launch of ethereum spot ETFs, analysts see less chance of the SEC greenlighting the products before the May 23 deadline. Most have moved the approval odds from around 70% to 50%-35% due to several factors, including the political backlash against SEC Chairman Gary Gensler following the launch of bitcoin spot ETFs in January.
Fidelity is not the only ethereum ETF applicant that intends to stake a portion of its ether; others such as Ark Invest/21Shares and Franklin Templeton have also indicated plans to bet their funds' assets.
Meanwhile, Fidelity's FBTC is the second-largest bitcoin spot ETF, after BlackRock's IBIT, with more than $7 billion in bitcoin under management.
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