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Key Takeaways
- Fidelity Investments has filed for a spot Ethereum ETF with staking capabilities, presenting a regulated option for investors to access Ethereum, the world’s second-largest cryptocurrency.
- This filing follows the successful launch of spot Bitcoin ETFs earlier in the year, indicating a growing interest from institutional investors in regulated cryptocurrency investment vehicles.
- Ethereum is a leading contender for ETF approval, with Fidelity’s filing following similar moves from other major investment firms such as BlackRock, VanEck, and ARK Invest.
Fidelity Investments aims to broaden its cryptocurrency offerings after the approval of its spot Bitcoin exchange-traded fund (ETF). The asset management company recently filed an S-1 form with the US Securities and Exchange Commission (SEC) for a spot Ethereum ETF, proposing to include staking a part of the ETH it holds.
Will The SEC Approve?
Fidelity’s application comes amid the ongoing SEC investigation into Ethereum‘s classification. According to Forbes, citing unnamed but credible sources, the regulatory agency has requested documents related to interactions with the Ethereum Foundation from various US companies since 2022. This probe reportedly began after Ethereum transitioned to a Proof-of-Stake consensus mechanism through its Merge event.
This has caught the attention of the SEC Chair, Gary Gensler, who expressed concerns that the staking mechanism in Proof-of-Stake might function similarly to an investment in security.
Analysts Divided On Spot Ether ETF Approvals
The report gave analysts varying opinions on the possibility of a spot Ether ETF being approved in the US. These concerns are heightened by the agency’s silence on the matter, pointing out that the SEC actively engaged with stakeholders and the press leading up to the approval of spot Bitcoin ETFs in January. The lack of current engagement has led them to believe the approval process for spot Ether ETFs may not be as smooth.
With the ongoing investigation on whether ETH should be classified as a security, the prospects of a spot ETF for ETH in the US become even more uncertain.