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Fidelity updates its Ethereum ETF application to include staking

The introduction of a staking option to ETF applications may attract new investors and make the product more attractive to existing customers.

Date: 2024-03-20 Author: Łukasz Michałek
Fidelity updates its Ethereum ETF application to include staking

on March 18, Fidelity updated its application for an Ethereum ETF-listed fund to the US Securities and Exchange Commission (SEC) to include staking.

Fidelity updated its Form 19b-4 claiming that from time to time it may invest a portion of the fund’s assets through one or more trusted staking service providers .

“According to the Registration Statement, the Sponsor may from time to time invest a portion of the Fund’s assets through one or more trusted staking providers, which may include an affiliate of the Sponsor (the “Staking Providers”). In exchange for any staking activity in which the Fund may engage, the Fund will receive certain network rewards in the form of ether tokens, which may be treated as income to the Fund in the form of compensation for services rendered. – reads Fidelity’s filing with the SEC.

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Staked ETH ETFs will face delays

Earlier this month, Chanchal Samadder, head of product at ETC Group, told Cryptonews that ETH’s main selling point for institutional investors is the return on investment. Many investors see staking as a way to reap rewards just by holding Ethereum. Samadder said: “We anticipate that in the United States the approval of staked ETH funds for ETH will be delayed, unlike in Europe, where these products are readily available to investors.”

Applications to date for ETH ETFs

In February, investment firm Franklin Templeton was the next asset manager to file an application with the SEC for an Ethereum ETF. Franklin Templeton joins a broad list of asset managers such as BlackRock, Fidelity, Grayscale, VanEck, Invesco and Galaxy, as well as Cathy Wood’s Ark Invests and 21Shares.

Providers say ETH ETFs are “inevitable” in the US

Earlier this month, the SEC delayed its decision to approve BlackRock’s Ethereum ETF fund. The SEC now has until May 23 to approve or deny VanEck’s application for an Ethereum ETF fund.

Many product providers are optimistic about approving more crypto products, believing that it is inevitable that the SEC will eventually approve Ethereum ETFs due to demand.

“I think it’s inevitable that Ether will be next,” Hector McNeil, co-founder and CEO of HANetf, a company that sells and distributes exchange-traded products, told Cryptonews: “If Bitcoin is approved and meets all liquidity requirements and asset class thresholds, then Ether will qualify.” – McNeil adds.

The SEC approved Bitcoin ETFs in January, sparking a trading frenzy as demand for the products continues to accelerate. One of the approved bitcoin ETFs is the BlackRock iShares Bitcoin Trust, traded under the stock symbol “IBIT.” The BlackRock ETF is leading the pack and has so far attracted $10 billion in assets under management (AUM) in less than two months since launch.

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Łukasz Michałek
Łukasz Michałek
Founder of the rapidly developing cryptocurrency channel "Biblia Kryptowalut" on YouTube. He also co-creates the Arena Trading group with Marek. Łukasz is fascinated and passionate about blockchain technology and cryptocurrencies, which constitute the central element of his activity in the cryptocurrency industry.
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