Fidelity takes another step toward spot ether ETF, but hurdles likely remain

The Fidelity Ethereum Fund, like other proposed ETH ETFs, seeks to stake a portion of its assets, according to the firm’s Wednesday registration statement

article-image

Sundry Photography/Shutterstock modified by Blockworks

share

Fidelity Investments is moving forward with its spot ether ETF proposal despite uncertainty around the near-term approval of such funds. 

It became clear the financial services giant was looking to launch an ETH ETF in November, when Cboe — the exchange on which the product would trade — filed a 19b-4 form on behalf of Fidelity

Now, the company filed a registration statement — known as a Form S-1 — Wednesday, marking another step in its bid to get the Fidelity Ethereum Fund approved. 

Read more: Coinbase met with SEC over spot Ethereum ETFs

The Securities and Exchange Commission would have to approve the 19b-4 as well as deem effective the S-1 form before the fund would be allowed to start trading. 

Fidelity did not reveal a ticker or fee for the proposed product in the latest filing

Similar to other proposals, however, the fund’s registration statement includes details about its intent to stake a portion of the trust’s assets via one or more staking infrastructure providers. 

“As a result of any staking activity in which the trust may engage, the trust expects to receive certain staking rewards of ether, which may be treated for federal income tax purposes as income to the trust,” it states.

The fund custodian — to be Fidelity Digital Asset Services — “will maintain exclusive possession and control of the private keys associated with any staked ether at all times,” the disclosure adds.

Fidelity is one of several issuers vying to launch a spot ether ETF just months after the SEC greenlit spot BTC funds.

The US securities regulator is expected to rule on ETFs looking to hold ETH directly in late May.

A number of industry watchers have said while they expect such funds to ultimately launch, the SEC is likely to drag its feet. Others are more optimistic, given the regulator’s approval of ether futures ETFs in October — an action that ultimately helped lead to spot BTC funds gaining approval. 

Read more: Ether ETFs coming in May? Here’s why many are bearish

SkyBridge Capital founder Anthony Scaramucci said during a panel at Blockworks’ Digital Asset Summit last week that he expects SEC Chair Gary Gensler “to do things to delay it.”

Gemini Chief Operating Officer Marshall Beard said it could take another six to nine months before the SEC approves spot ether ETFs — adding that funds that stake their assets are “not going to be version one.”

The pursuit by Fidelity and others to bring to market a spot ether ETF comes as spot bitcoin ETFs continue to attract investor assets

The 10 US spot bitcoin ETFs have notched net inflows of about $11.7 billion since launching on Jan. 11. 
Another fund joined the category Wednesday, as Hashdex’s bitcoin futures fund was cleared to hold BTC directly.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Templates.png

Research

ZKPs enable efficient offchain transaction processing and validation, resulting in increased throughput and reduced fees. Solana's ZK Compression leverages ZKPs to minimize onchain storage costs, while Sui's zkLogin streamlines user onboarding by replacing complex key management with familiar OAuth credentials.

article-image

North Korea suspected in breach of Indian exchange’s multisig wallet

article-image

Plus, Sanctum’s CLOUD token has officially launched — but not without problems

article-image

It’s not yet clear whether Donald Trump is pumping bitcoin. But an unofficial memecoin is still seeing benefit.

article-image

StarkWare takes a step towards making StarkNet for Bitcoin

article-image

The numbers point to one conclusion: Risk is back, or at least it was during the first half of the year