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Fidelity is moving. The asset manager filed with the SEC to add staking to its Ethereum ETF, the Fidelity Ethereum Fund — ticker FETH — and the structure is pretty straightforward: the fund can stake up to 100% of its Ether holdings, except for whatever’s set aside for redemptions, expenses, and liquidity needs.
The reward split is 85/15. Fidelity keeps 85% of staking rewards for the fund, while 15% goes toward covering staking fees. Investors will also get quarterly cash distributions, though Fidelity was clear those aren’t guaranteed. The prospectus, still preliminary as of the filing, says staking will kick off “as soon as practicable” once the registration statement is finalized — but that document is still open to revisions, so nothing’s locked in yet.
Where FETH Stood Before This Filing
The fund’s been around since July 2024. As of August 11, FETH had pulled in roughly $2.13 billion in cumulative net inflows since launch, per Farside Investors. Not bad. And before U.S. markets opened Wednesday, FETH was leading pre-market gains among most Ethereum funds — up 2.4%, per Yahoo Finance data.
But it’s been playing catch-up on staking. Ryne Mauck, a contributor at Seeking Alpha, put it bluntly: FETH’s lack of staking had put it at a “relative disadvantage” next to Grayscale and BlackRock’s staking-enabled products. That framing probably didn’t sit well at Fidelity HQ.
The Competitive Race for Ethereum Staking ETFs
Grayscale got there first. It pioneered staking in U.S. spot crypto ETFs back in October 2025 — a meaningful head start. BlackRock followed in February 2026 with the launch of its iShares Staked Ethereum Trust ETF, trading under the ticker ETHB. Two of the biggest names in asset management, both already offering staking yield to investors.
Bitwise tried a different path. The firm initially sought to add staking to its own Ethereum ETF but pulled that proposal in September 2025. No public explanation, and the source didn’t specify why. Unclear whether Bitwise plans to revisit that.
Fidelity, one of the largest asset managers in the world, is now catching up fast. The filing puts it in line with Grayscale and BlackRock, and the 85% reward retention structure is competitive. Whether it’s enough to close the gap with funds that already have staking running — that’s the real question.
Staking in crypto ETF products is kind of a big deal right now. Ethereum validators earn yield by locking up ETH to help secure the network, and that yield gets passed through to fund investors in staking-enabled products. For passive investors who want Ethereum exposure without running their own validator node, it’s basically free income on top of price appreciation — or price depreciation, depending on the market. The yield doesn’t make the volatility go away.
Fidelity’s move probably won’t be the last. The competitive pressure in the U.S. crypto ETF space has been building since spot Bitcoin ETFs launched and pulled in enormous inflows. Ethereum ETFs followed, and now staking is the next feature everyone’s racing to offer. Asset managers that can’t match the yield of staking-enabled competitors will keep facing that “relative disadvantage” label.
The 15% fee cut for staking services is worth watching too. Staking infrastructure isn’t free — validators, slashing risk management, and operational overhead all cost money. Fidelity didn’t name a staking provider in the filing, and the source didn’t specify one either. That detail will probably show up when the prospectus is finalized.
Quarterly cash distributions are an interesting addition. Most ETF investors are used to price-only exposure — you make money when the token goes up, you lose when it goes down. Adding a cash distribution component changes the profile of the product, at least a little. It’s not a dividend in the traditional sense, and Fidelity was careful to say it’s not guaranteed. But for income-focused investors, it’s a hook.
The SEC still needs to sign off. The prospectus is preliminary, revisions are possible, and staking won’t start until the registration statement clears. Fidelity said “as soon as practicable” — which is legal-speak for “we’re ready when you are.” The agency’s posture toward crypto staking in registered products has softened considerably since 2024, so approval seems probable, but not certain.
FETH’s $2.13 billion in net inflows since July 2024, and that 2.4% pre-market pop on Wednesday.
Frequently Asked Questions
How will Fidelity split staking rewards in the FETH fund?
Fidelity plans to retain 85% of staking rewards for the fund, with the remaining 15% covering staking fees. Quarterly cash distributions to investors are planned but not guaranteed.
Which other Ethereum ETFs already offer staking?
Grayscale launched staking in U.S. spot crypto ETFs in October 2025, and BlackRock followed with its iShares Staked Ethereum Trust ETF (ETHB) in February 2026.
