Asset manager Fidelity Investments has modified its Ethereum ETF proposal to include staking and expand investor opportunities.
In the amendment filed for its Fidelity Ethereum Fund, the company noted that it wants to provide investors with the Possibility of staking some of the fund's assets, if the Securities and Exchange Commission (SEC) approves such application.
The amendment comes four months after the original proposal was sent to the SEC to launch the Fidelity Ethereum Fund and just two months before the deadline for the agency to respond on the matter expires.
Fidelity, which manages the third-largest Bitcoin exchange-traded fund by assets in reserve, wants to offer its investors a regulated and simple way to gain exposure to the second most capitalized cryptocurrency on the market, Ethereum, which is currently trading around $3.200 per ETH.
An attractive modification
ETH staking, which is a fundamental part of the Ethereum ecosystem, is an issue that has been discussed in relation to spot ETFs. While Bitcoin spot ETFs have been a huge success by expanding access to BTC for investors and institutions, experts believe that something more is needed when it comes to Ethereum, as Ethereum has different characteristics than Bitcoin.
Some analysts believe that the approval of a spot ETF that allows investors to stake the fund's assets will be a success that will attract many investors interested in cryptocurrency, while others believe that the approval of an ETF with these characteristics will take a long time and that the modification Fidelity's filing is yet another sign that these funds will not be approved this year.
In this regard, Bloomberg ETF analyst James Seyffart indicated that while Fidelity is hopeful that the SEC will approve its ETH-based investment vehicle, the chances of this happening are still very low. In previous tweets, Seyffart had pointed out that the SEC is not meeting with fund issuers to fine-tune their ETF proposals as it did with Bitcoin.
Pros of the Ethereum ETF
While the approval of Ethereum ETFs is unclear, analysts believe that the second-largest cryptocurrency in the crypto market has a chance among the financial elite.
Researcher JJ Campuzano told Cointelegraph that Ethereum ranks favorably on the ESG criteria that many organizations and companies in the financial sector, such as BlackRock and Fidelity, have prioritized to ensure their operations are sustainable.
“Its technology and production of green energy are aligned with sustainable principles”, Campuzano said. The researcher also highlighted the potential growth of Ethereum's market capitalization and the level of demand and adoption of the network, which is widely known as the leading platform for the development of smart contracts.
However, the SEC has until May 23 to announce its decision on whether or not it will approve ether-based ETFs, and several experts believe that the regulator is not giving good signals in this regard.
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