Financial giant Fidelity has taken its proposal for a spot Ethereum exchange-traded fund (ETF) a step further by seeking to include staking, a feature that could generate additional income for investors.
The move sent ripples through the crypto industry, with Lido DAO, a leading Ethereum staking provider, experiencing a brief price bump before settling back down.
Fidelity Seeks Permission to Stake Ethereum
Source: CBOE
In an amendment filed with the U.S. Securities and Exchange Commission (SEC) on March 18th, Fidelity expressed its intention to stake a portion of the ETF's Ethereum holdings through trusted providers. While specific providers weren't named, established players like Lido DAO, RocketPool, and StakeWise could be potential partners.
Staking Potential Boosts Lido DAO
Source: TradingView
The news initially sparked a 6% price increase for Lido DAO, the dominant player in liquid Ethereum staking. However, the token's price quickly retreated, reflecting the broader market pullback impacting Ether and related tokens.
Fidelity Joins Crowded Race for Spot Ethereum ETF
Fidelity is one of eight contenders vying for SEC approval to launch a spot Ethereum ETF. Ark 21Shares and Franklin Templeton have also proposed similar ETFs with staking capabilities. Industry heavyweights like BlackRock, ARK Invest, and Grayscale are also in the running.
Read more: Binance CEO Bullish on Bitcoin, Predicts Price to Surpass $80,000 by Year-End
Time Running Out for SEC Approval
A critical deadline looms for these hopeful issuers. VanEck, another ETF applicant, faces a May 23rd deadline for SEC approval. If the SEC doesn't act by then, all eight proposals will require resubmission, potentially delaying their launch significantly.
Analyst Cautious on SEC Approval Timeline
Bloomberg ETF analyst Eric Balchunas throws cold water on the chances of a May approval, estimating a mere 35% likelihood. This pessimism stems from the SEC's silence towards applicants and recent political pressure against Chair Gary Gensler.
Fidelity's move to incorporate staking adds a new wrinkle to the already competitive race for a spot Ethereum ETF. With a crucial deadline approaching and regulatory hurdles to clear, the future of these ETFs remains uncertain.
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Disclaimer: This response provides information based on available data and general analysis. It does not constitute financial advice. Always perform your own due diligence and consult with a professional financial advisor before making investment decisions.