Fidelity Investments is moving to add Ethereum staking to its Fidelity Ethereum Fund (FETH), according to a filing submitted to the U.S. Securities and Exchange Commission.
The proposed change would allow the fund to generate additional returns from its Ether holdings while distributing part of those staking rewards to investors.
Fidelity Ethereum ETF Could Stake Most of Its ETH
Under the proposal, FETH could stake up to 100% of its Ether holdings under normal market conditions.
However, Fidelity would keep some ETH unstaked when necessary to meet redemption requests, cover fund expenses and maintain adequate liquidity.
The asset manager said staking would begin as soon as reasonably possible after the updated prospectus takes effect.
The filing remains preliminary and could still be revised before receiving final regulatory approval.
Investors Would Receive 85% of Staking Rewards
Fidelity plans for the Ethereum ETF to retain 85% of the staking rewards generated by the fund.
The remaining 15% would be used to cover staking-related fees and expenses.
Fidelity also intends to make quarterly cash distributions to investors from staking proceeds. However, the company noted that these payments would not be guaranteed.
Adding staking could make FETH more competitive with other Ethereum investment products that already offer exposure to staking rewards.
Fidelity Follows Grayscale and BlackRock
Fidelity is not the first major asset manager to pursue staking within a U.S. Ethereum investment product.
Grayscale became the first U.S. issuer to introduce staking to spot cryptocurrency exchange-traded products in October 2025.
BlackRock followed by launching its iShares Staked Ethereum Trust ETF (ETHB) in February 2026.
Bitwise had also proposed adding staking to its Ethereum ETF but later withdrew the plan in September 2025.
The growing number of staking-enabled products reflects increasing competition among asset managers for investors seeking both Ethereum price exposure and potential staking income.
Staking Could Improve FETH’s Competitive Position
FETH’s previous lack of staking had been viewed as a potential disadvantage compared with competing Ethereum ETFs.
Seeking Alpha contributor Ryne Mauck argued in May that the absence of staking placed Fidelity’s fund at a relative disadvantage to products offered by Grayscale and BlackRock.
If approved, the new structure could help Fidelity close that gap by giving investors access to a larger share of the economic benefits associated with holding and staking ETH.
Fidelity Ethereum Fund Sees Strong Investor Demand
FETH has attracted significant investor interest since launching in July 2024.
As of August 11, the fund had recorded approximately $2.13 billion in cumulative net inflows, according to Farside Investors data cited in the report.
The ETF was also among the strongest-performing Ethereum funds in premarket trading ahead of Wednesday’s U.S. session, gaining around 2.4%.
Overall, Fidelity’s move to introduce staking could make its Ethereum ETF more attractive to investors seeking both cryptocurrency exposure and potential income from staking rewards.
