coinculture.com
Fidelity, boasting $4.5 trillion in assets under management, has formally lodged an S-1 form with the US Securities and Exchange Commission (SEC), revealing intentions for a spot Ethereum exchange-traded fund (ETF) that notably incorporates staking.
This strategic move comes in the wake of the approval earlier in the year of the inaugural spot Bitcoin ETF in the US, where Fidelity stood out as one of the pioneering issuers.
Following the green light for spot Bitcoin ETFs in January, which drove BTC’s price to a historic high of $73,000, industry observers are now speculating about the next significant cryptocurrency to be wrapped into an ETF. Ethereum consistently emerges as a top contender.
The Fidelity Ethereum Fund intends to issue shares for trading on the Chicago Board Options Exchange (CBOE) and introduces the innovative inclusion of staking, providing investors with a fresh avenue for earning rewards.
“The Fidelity Ethereum Fund (the ‘Trust’) is an exchange-traded product that issues shares of beneficial interest seeking to list and trade on the Cboe BZX Exchange, Inc. The Trust’s investment objective is to track the performance of ether, measured by the Fidelity Ethereum Reference Rate, adjusted for the Trust’s expenses and other liabilities,” explained the company in the filing.
This filing isn’t Fidelity’s initial venture into Ethereum ETFs. It had previously submitted a filing in November 2023 alongside other financial heavyweights like BlackRock, VanEck, and ARK Invest.
However, the journey to approval is fraught with regulatory challenges. The SEC has recently embarked on a legal campaign questioning Ethereum’s regulatory status, casting uncertainty over the fate of Ethereum ETFs. Despite this, industry optimists, such as GrayScale’s Chief Legal Officer Craig Salm, remain hopeful.
Salm draws parallels with the trajectory of the spot Bitcoin ETF, suggesting that the groundwork laid during previous negotiations could expedite the approval process for Ethereum ETFs.
“All of these issues were resolved and are identical when comparing spot Bitcoin to Ethereum ETFs. The only distinction is that instead of holding bitcoin, the ETF holds ether. So, in many respects, the SEC has already engaged, and issuers simply have fewer obstacles to navigate this time,” noted Salm.
The potential for a spot Ethereum ETF, particularly one incorporating staking, marks a significant milestone in the development of cryptocurrency investment products.