Fidelity, a leading financial services company, is seeking approval to use a portion of the Ether (ETH) held by its proposed Ether exchange-traded fund (ETF) to generate additional income for investors. In a filing with the United States Securities and Exchange Commission on March 18, Fidelity stated that if the ETF is approved, it would stake an undisclosed amount of its assets through trusted staking providers. Fidelity did not disclose the specific staking provider but mentioned that it could include an affiliate of the company. Other Ether staking providers in the market include Lido DAO, RocketPool, and StakeWise.
The news of Fidelity’s decision caused a brief 6% increase in the price of Lido DAO, the largest liquid Ethereum staking provider, before it fell back to its previous level. However, Lido DAO and many other tokens within the Ethereum ecosystem have experienced a wider pullback in the past week, leading to a 27% decrease in Lido DAO’s price.
Fidelity is one of eight companies that have applied for an Ether ETF, all of which are currently awaiting approval from the SEC. Ark 21Shares and Franklin Templeton have also expressed their intention to stake a portion of their proposed funds’ Ether to generate additional income.
If the SEC does not approve all eight ETFs by May 23, the companies will have to refile their applications at a later date. Bloomberg ETF analyst Eric Balchunas believes that the likelihood of a spot Ether ETF approval by the deadline is currently at 35%, down from the previous estimate of 70% in January. Balchunas attributes this decrease in likelihood to the SEC’s lack of communication with fund issuers and the political challenges faced by Chair Gary Gensler.