Fidelity Adds Staking To Ethereum ETF Application, But Analysts Don't Think It Will Help

Fidelity is seeking permission to stake a portion of the Ethereum ETH/USD held by their proposed spot Ethereum ETF.

This would allow ETF investors to potentially earn additional income through staking rewards.

What Happened: In the updated filing, Fidelity indicated its intention to engage "trusted staking providers" for this purpose, potentially including affiliates of Fidelity itself.

While the firm stopped short of naming any specific staking services, the market includes notable entities such as Lido DAO LDO/USD, RocketPool, and StakeWise. Following the announcement, Lido DAO, the leading liquid Ethereum staking provider, experienced a brief 6% price surge, according to TradingView data.

Despite this uptick, Lido DAO and the broader Ether ecosystem have faced a downturn, with Lido DAO's value decreasing by 27% over the past week amid a general pullback for Ether and related tokens.

Fidelity's application is part of a competitive field, with seven other issuers, including heavyweight firms like BlackRock, ARK Invest led by Cathie Wood, and Grayscale, also vying for SEC approval to launch Ether ETFs.

Notably, Ark 21Shares and Franklin Templeton have similarly expressed intentions to incorporate staking into their Ether ETF structures.

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Why It Matters: The SEC faces a deadline of May 23 to render a decision on the suite of Ether ETF applications, including Fidelity's.

Should the SEC opt not to approve the proposals, the applicants will be required to resubmit at a future date.

Bloomberg ETF analyst James Seyffart commented on the situation, expressing skepticism about the likelihood of approval but clarifying his stance that such proposals should not be outright denied. Seyffart emphasized Fidelity's persistent efforts to innovate within the Ethereum ETF space, despite regulatory hurdles.

Price Action: At the time of writing, Bitcoin was trading at $3,281, down 7.5% over the past 24 hours, according to data from Benzinga Pro.

Read Next: Bitcoin Plunges Below $63,000, Triggers Market-Wide Crypto Selloff

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