Fidelity Plans to Increase Profits by Staking Ether from Proposed ETF
Summary:
Financial giant Fidelity is planning to earn additional income by staking a portion of the Ether (ETH) held by its proposed Ether Exchange-Traded Fund (ETF), as detailed in a recent amendment filing to the U.S. Securities and Exchange Commission. However, the ETF is currently awaiting approval. This move was triggered by the ongoing trend in the Ether ecosystem with Lido DAO, the largest Ethereum staking provider, previously experiencing a price increase then drop. Fidelity's strategy is aligned with actions of major players including Ark 21Shares, Franklin Templeton, BlackRock, ARK Invest, and Grayscale who are all vying for ETF approval. Future approvals depend on the final decision of regulatory body SEC.
Leading financial institution, Fidelity, is set to ramp up its potential income by staking a certain amount of Ether (ETH) that would be owned by its proposed Ether Exchange-Traded Fund (ETF). It made this clear in an updated filing, known as a 19b-4 amendment, to the U.S. Securities and Exchange Commission on March 18th. Should the Ether ETF receive approval, some of the fund's assets would be staked through one or more reputable staking facilitators.
This information was contained in a revised application where it stated it may on occasion elect to stake a portion of the proposed ETF’s assets through reputable staking service providers, including the option of an affiliate. The amendment to its Ether ETF application made provision for staking. Fidelity however, did not reveal a specific staking service provider. The crypto staking ecosystem currently boasts a number of reliable providers, including Lido DAO, RocketPool, and StakeWise.
As news of the development broke, Lido DAO, currently the biggest Ethereum staking provider, saw its price leap by 6%, moving from $2.48 to $2.56, before reverting to $2.49 according to TradingView data. Despite this, Lido DAO experienced a 27% plummet over the last week, reflecting a generally prevailing downward trend for Ether and its associated tokens.
Among eight fund issuers seeking approval for an Ether ETF from the SEC, Fidelity filed its application on Feb. 8, with Ark 21Shares also voicing plans to stake some of the Ethereum held by its proposed fund a few days later. They were closely followed by Franklin Templeton vying for similar interests in spot Ether ETFs.
Other entrants into the race from Nov. 18 last year include BlackRock - the world's leading investment firm – and ARK Invest spearheaded by Cathie Wood, and Grayscale, a crypto assets management giant. Each issuer will need to refile their applications if approval is not granted by the Van Eck's deadline on May 23.
Observing this unfolding scenario, Bloomberg's ETF analyst Eric Balchunas indicates that the possibility of a spot Ether ETF getting the nod from Van Eck in May stands at a mere 35%. The once hopeful 70% prediction dropped, due to the SEC’s lack of response to prospective fund issuers and the serious backlashes against Chair Gary Gensler, reflecting negatively on the entire approval process.
Published At
3/19/2024 3:14:26 AM
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