Fidelity Files SEC to Add Staking to Ethereum ETF, Following Grayscale and BlackRock

Woofun AI reports that Fidelity Investments filed with the SEC to integrate staking into the Fidelity Ethereum Fund (FETH), marking a strategic pivot to align with industry peers. This regulatory submission signals the asset manager's intent to capture yield from its spot Ether holdings, directly addressing prior competitive disadvantages.

Structurally, the fund proposes staking up to 100% of its ETH under normal conditions, excluding reserves for redemptions and liquidity. Per Woofun AI, the mechanism retains 85% of staking rewards for investors while allocating 15% to fees, with quarterly cash distributions planned. Filed on Tuesday, the proposal follows FETH's accumulation of $2.13 billion in net inflows as of Aug. 11, since its July 2024 launch, according to Farside Investors.

The deeper driver is the competitive timeline established by rivals. Grayscale enabled staking in October 2025, while BlackRock launched the iShares Staked Ethereum Trust ETF (ETHB) in February 2026. Bitwise attempted a similar addition in September 2025 but withdrew. Ryne Mauck noted in May on Seeking Alpha that FETH's lack of staking put it at a "relative disadvantage" to staking-enabled products from Grayscale and BlackRock.

Market reaction was immediate, with the ETF leading pre-market gains across most ETH funds, up 2.4% ahead of Wednesday's open. The preliminary prospectus remains subject to change before the registration statement becomes effective. This filing represents a critical catch-up move in the yield-bearing ETF landscape.