Ethereum ETF Staking: Fidelity Files for SEC Approval – Will This Boost ETH’s Value?

Ethereum ETF Staking: Could Fidelity’s SEC Filing Lead to Higher Yields for Investors?

Ethereum ETF Staking – Fidelity, through the CBOE Exchange, has filed an application with the SEC to gain approval for offering staking in its Ethereum (ETH) ETF product. This move follows a similar application made by 21Shares and Grayscale earlier this year, reflecting growing optimism surrounding the inclusion of staking features in U.S. spot ETH ETFs.

ETH ETF Assets and Staking Potential

The Ethereum ETFs launched last summer have accumulated around $7 billion in total net assets, currently locked in custody accounts. However, these assets could generate additional yield if staked. Staking involves delegating a portion of ETH to validators who secure the blockchain network and, in return, reward stakers with additional tokens.

The Growing Interest in Staking Rewards

Even Bitwise is considering a similar application in the U.S., citing potential benefits for investors. Matt Hougan, CEO of Bitwise, recently mentioned in a Bloomberg interview, “ETPs should stake. We’ve seen in Europe that staking ETPs work and help increase investor returns and boost network security.”

According to Etherealize founder Vivek Raman, the absence of staking has hindered the adoption of ETH ETFs. He believes that staking could not only bring in more capital but also provide a differentiated narrative around Ethereum.

Staking Rewards and Yield Potential

According to Staking Rewards, staked ETH currently offers an annualized return of about 3.7%. These additional staking rewards could increase the appeal of the ETH ETF, potentially driving demand and offering investors an extra incentive.

At present, the only yield available to asset managers through ETH ETFs comes from the CME Ethereum basis trade, involving buying spot ETH ETFs and opening a short position on the CME Futures to capture the price difference. This strategy yielded nearly 20% during the November 2024 uptrend. If staking rewards were incorporated, the yield could increase to 23%.

ETH Price and Future Outlook

As of now, ETH is priced at $1,880, a 54% decrease from its peak of $4,000. It remains to be seen whether the introduction of staking features in ETH ETFs will drive the value of Ethereum back up or not.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.