Fidelity is supercharging its ETH ETF

Fidelity Adds Staking to Its Ethereum ETF

Fidelity, one of the world's largest asset managers with more than $7 trillion in assets under management, is moving to formally implement staking and quarterly cash distributions for its spot $ETH ETF, the Fidelity Ethereum Fund (FETH).

According to CoinDesk, FETH, with $898 million in net assets, could stake as much as 100% of its ether under normal conditions, though Fidelity set no minimum, according to an amended registration statement.

According to an SEC filing, on August 7, the fund signed custodial services agreements with Anchorage Digital Bank NA and BitGo Bank and Trust, N.A. The fund's sponsor, FD Funds Management LLC, will use these custodians to facilitate the staking of the fund's ether through trusted node operators.

The fund will retain 85% of staking rewards, with the remainder distributed as fees among the sponsor, custodians, and node operators. The fund also plans to make quarterly cash distributions of net staking income to shareholders, which may involve selling staking rewards or a portion of its ether holdings.

A Broader Shift Across the Crypto ETF Landscape

The structural change gives both institutional and individual investors a way to earn block-level staking rewards through a regulated brokerage channel, converting $ETH's yield-generating potential into periodic cash payouts. The shift follows an IRS safe harbor bulletin issued in November 2025 that lets qualifying crypto trusts stake assets without losing their grantor-trust tax status.

The move follows similar initiatives from Grayscale and 21Shares, while BlackRock launched a separate staking product. Grayscale's Ethereum Staking ETF made a distribution to shareholders in January 2026, marking the first time a spot crypto ETP in the U.S. distributed staking rewards to shareholders.

Fidelity's sponsor expects to begin staking activities as soon as the fund's registration statement becomes effective. With nearly $900 million in net assets already on the books, FETH's move into staking underscores the accelerating push among traditional asset managers to deepen the yield profile of their crypto products.

Sources:
CoinDesk: Fidelity moves to add staking, quarterly payouts to near $900 million ether ETF
Investing.com: Fidelity Ethereum Fund announces new custodial agreements and staking program
SEC Filing: Grayscale Ethereum Staking ETF first U.S. staking reward distribution