Fidelity, a renowned financial services giant, has submitted a request to the SEC seeking permission to hold Ethereum in spot Ethereum exchange-traded funds (ETFs), aiming to provide investors with additional income opportunities. This move was highlighted in a 19b-4 amendment filed on March 18, where Fidelity outlined its intention to pledge an undisclosed portion of the fund's assets through trusted pledge providers, potentially including affiliates of the Sponsor.
In the amended filing, Fidelity stated, "The Sponsor may, from time to time, pledge a portion of the Fund's assets through one or more trusted pledge providers, which may include affiliates of the Sponsor ('Pledge Providers')." The specific staking provider chosen by Fidelity was not disclosed, although various Ethereum staking providers exist in the market, such as Lido DAO, RocketPool, and StakeWise.
Following this announcement, the price of Lido DAO, one of the leading liquid Ethereum staking providers, experienced a brief surge of 6%, rising from $2.48 to $2.56 before retracing to $2.49, according to TradingView. However, Lido DAO faced a 27% decline the previous week amidst a broader downturn in Ethereum and associated tokens within its ecosystem.
Fidelity is among eight fund issuers awaiting SEC approval for an Ethereum ETF. Notably, Ark 21Shares revealed plans to stake a portion of its proposed fund's ETH on February 8, with Franklin Templeton also intending to stake a segment of its ETF's ether for additional income. This initiative began on November 18 last year, with participation from major firms such as BlackRock, ARK Invest, and Grayscale.
However, if the SEC fails to approve all eight ETFs by Van Eck's May 23 deadline, all potential issuers will be required to resubmit their applications at a later date. Bloomberg ETF analyst Eric Balchunas suggested there is only a 35% likelihood of approval for an Ethereum spot ETF before Van Eck's deadline. Previously, in January, Balchunas had estimated a 70% probability of approval but cited the SEC's silence on fund issuers and political pushback against Chairman Gary Gensler as factors impeding the approval process.
