Fidelity Investments, one of nine hedge fund managers seeking approval for an Ethereum ETF in the United States, has removed mentions of ETH staking from its prospectus.
The changes come amid renewed optimism among investors and the crypto community over the potential approval of Ethereum exchange-traded funds.
According to the latest reports, Fidelity is making several quick changes to the S-1 filing for its “Fidelity Ethereum Fund.” The changes primarily focus on removing mentions of ether staking, meaning the manager’s ETF will not lock up part of the fund’s assets to participate as a cryptocurrency staking provider.
According to experts, the changes made by the company to its ETF prospectus ensure a simplified investment strategy, which has a greater chance of being approved by the Securities and Exchange Commission (SEC), amid the regulatory uncertainty surrounding Ethereum.
In addition to Fidelity, Grayscale Investments also filed a new updated prospectus for its Ethereum ETF today.
SEC will not approve Ethereum staking in ETFs
According to comments According to experts, Ethereum staking, a mechanism that allows ether holders to lock up their cryptocurrencies to support the blockchain network in exchange for ether rewards, “may resemble investment contracts that fall under securities regulations.” Because of this, they argue that the removal of this validation mechanism in the language of spot ETFs was something to be expected, if regulator approval is sought for these new cryptocurrency financial instruments.
The SEC may perceive ETH as a security due to staking, because it promises profits to holders of the cryptocurrency.
On this, Galaxy Digital's head of research, Alex Thorn, commented that the SEC may be trying to differentiate ETH from when it is a security and when it is not, in order to remain consistent on the cases currently developing on this topic.
“If the rumors about an SEC 180 on Ethereum ETFs are true, my guess is that they are attempting to thread a needle between “ETH” NOT being a security and “staked ETH” being a security… That would be somewhat consistent with their various court cases, as well as reporting on their various investigations, and would perhaps allow the SEC to approve Ethereum ETFs while maintaining their previously stated and argued views,” Thorn said.
ETH price surpasses $3.800
Amidst all these changes, optimism about the potential approval of Ethereum spot ETFs continues to grow, which is driving the price of ETH higher in the market.
At the time of writing, the price of ETH is above $3.800 per unit, according to data from CoinMarketCap. Likewise, the trading volume of ETH continues to increase, exceeding a growth of 330% in the last 24 hours. In this period, a total volume of $48.360 billion has been traded in ETH.
The approval of Ethereum spot ETFs would have major implications for the price of the cryptocurrency, which could reach a new all-time high of $8.000 this year, according to Standard Chartered. Like Bitcoin, Ethereum ETFs can facilitate the inflow of institutional money into the cryptocurrency, becoming an important catalyst for a new bull run in the crypto market.
