A game-changer. That’s what Fidelity‘s latest move could be for crypto investors. The financial giant is pushing the SEC to let its Ethereum ETF start staking—potentially offering holders that sweet, sweet passive income without the technical headaches of doing it themselves.
On March 11, 2025, Cboe BZX Exchange filed paperwork with the SEC seeking to amend rules for Fidelity’s Ethereum Fund (FETH). The proposal would allow the nearly $1 billion fund to stake its Ethereum holdings. Currently, no U.S. crypto ETFs can stake their assets. Ridiculous, right?
The potential upside is significant. Ethereum staking currently yields around 3.3% APR. Not exactly get-rich-quick territory, but hey—in this market, who’s complaining about extra income? For investors, it means potentially higher returns without learning what a validator node is or worrying about slashing penalties. Let the pros handle the technical stuff. This mirrors the popular staking-as-a-service approach where third parties maintain validator nodes for users who own ETH but lack technical expertise. This setup represents a middle ground between traditional finance and smart contract automation that defines DeFi’s core functionality.
Timing matters here. Ethereum ETFs only started trading in July 2024 after May’s regulatory approval. They’ve faced outflows recently. Market’s tough. Adding staking could give Fidelity’s offering a competitive edge and more accurately track Ethereum’s full performance.
The SEC hasn’t exactly been crypto’s biggest fan. But times change. New administration, new attitudes. February 2025 saw multiple crypto ETF filings acknowledged. Progress, finally.
Technical challenges remain substantial. Balancing staking with ETF liquidity isn’t simple. Investors expect 24-hour redemption capability, but staked ETH has lock-up periods. Fidelity’s solution? “Trusted staking providers.” Whatever that means.
If approved, the impact could ripple through markets. Bitcoin Suisse forecasts that Ethereum ETFs could outperform Bitcoin ETFs due to their staking capabilities and yield potential. More institutional money might flow into Ethereum. Supply gets locked up, potentially boosting prices. Other providers like 21Shares are filing similar proposals. Competition breeds innovation.
For regular investors, this represents another step toward mainstream crypto adoption. Traditional finance keeps absorbing elements of DeFi. The barriers between old and new finance continue to blur. Evolution happens. Sometimes slowly, sometimes all at once.
