Fidelity Moves to Add Staking and Quarterly Payouts to Its ~$900M Ether ETF

Spot Ethereum ETFs have mostly sold investors on price exposure alone so far. Fidelity is now trying to turn its fund into something closer to an income product.

Fidelity filed to add staking to its roughly $900 million spot Ethereum ETF, FETH, with the ability to stake up to 100% of the fund’s ETH holdings. Under the proposed structure, Fidelity would keep 85% of gross staking rewards, with the remaining 15% split among named staking infrastructure partners, Blockdaemon, Figment, and Galaxy, covering node operation and custody. Net rewards would be distributed to shareholders as quarterly cash payouts.

This follows a broader thaw in the SEC’s posture toward staking-enabled crypto ETFs after it had previously blocked the feature outright. Naming specific infrastructure partners rather than staking in-house signals that Fidelity is leaning on established, institutional-grade node operators rather than building that capability internally, a choice likely aimed at minimizing operational and slashing risk within the fund.

The quarterly cash distribution is the detail that changes the product’s character most. A spot ETH ETF that only tracks price is a pure directional bet; one that pays out staking yield on a schedule starts to resemble a dividend-style holding, potentially appealing to a different pool of allocators who specifically want yield rather than just spot exposure.

If approved, this also raises the competitive bar for every other spot ETH ETF issuer, including BlackRock’s ETHA, since a staking-enabled, income-paying fund could pull assets away from funds offering price exposure alone.

Want to understand how ETH staking rewards actually work and what risks come with delegating to a node operator? Learn more in the Bitcoin Academy.