Fidelity has taken a significant step toward integrating Ethereum's native yield into a regulated investment product. The asset manager filed with the U.S. Securities and Exchange Commission (SEC) to add staking to its Fidelity Ethereum Fund (FETH), which currently holds over $898 million in net assets. If approved, the spot Ethereum ETF would be able to stake nearly its entire ETH portfolio, excluding assets reserved for redemptions, expenses, and liquidity needs.
The proposal marks the latest effort by a major financial institution to offer investors exposure to Ethereum's proof-of-stake rewards without the operational burden of running validators. FETH would not have a minimum staking requirement; instead, the percentage of ETH staked would depend on the fund's liquidity, redemption, and operational requirements. Staking would be conducted through custodians including Anchorage Digital Bank, BitGo Bank, and Fidelity Digital Assets.
Under the proposed structure, FETH would retain 85% of gross staking rewards, with the remaining 15% allocated as fees to the sponsor, custodians, and node operators. Net rewards would first cover fund expenses, and any surplus would be distributed to investors in cash quarterly, following IRS Revenue Procedure 2025-31. This could provide shareholders with a potential income stream from Ethereum staking, a feature that might make FETH more attractive compared to other Ethereum ETFs.
However, staking carries inherent risks, including slashing penalties, technical failures, delayed withdrawals, and fluctuating reward rates. Final returns would depend on Ethereum's staking yield, the proportion of the portfolio staked, fund expenses, and service provider fees. The proposed amendment remains subject to SEC approval, and there is no guarantee it will be granted.
Meanwhile, Ethereum's price action remains choppy. On the 4-hour chart, ETH is trading around the 20-day exponential moving average (EMA) of $1,884, above the 50-day EMA of $1,864, suggesting a mildly constructive short-term outlook. However, the cryptocurrency faces resistance at the 100-day EMA near $1,922. Momentum indicators are neutral, with the Relative Strength Index near 47 and the MACD lines poised to cross into bullish territory.
A sustained move above the 100-day EMA could allow ETH to challenge the horizontal resistance at $1,961. If buyers clear that level, the next upside targets are around $2,172 and $2,431. On the downside, the 20-day and 50-day EMAs provide immediate support. A break below those could send ETH toward $1,809, followed by $1,701. In a deeper correction, additional support may emerge near $1,507 and $1,415.
Recent ETF flows have been mixed. U.S. spot Ethereum ETFs saw net outflows of $16.3 million on Monday and Tuesday, but recorded an inflow of $7.38 million on Wednesday, led by BlackRock's ETHA. Collectively, these funds hold approximately $10.48 billion in net assets. Adding staking could boost demand for FETH, but the broader market remains cautious as ETH consolidates below key resistance.
Investors are also watching other developments, such as staking cap proposals that could affect Ethereum's supply dynamics. Meanwhile, Bitcoin's price action and gold's recent strength are influencing overall risk sentiment. For Ethereum, the path to $2,000 hinges on breaking through the 100-day EMA and sustaining momentum, with Fidelity's staking move adding a potential catalyst.
This article is for informational purposes only and does not constitute financial advice.
