Fidelity Could Turn Its Ethereum ETF Into A Yield Generator

Fidelity has taken a step toward turning its spot Ethereum fund into a yield-generating product, filing a preliminary amendment with regulators to add staking to the Fidelity Ethereum Fund, ticker FETH.

What the Filing Proposes

FETH could stake up to 100% of its Ether under normal conditions, excluding ETH reserved for redemptions, expenses, and liquidity needs. The fund would continue tracking the price of $ETH while also generating income through staking participation.

The fund would retain 85% of staking rewards, with 15% going toward staking fees, and plans quarterly cash distributions, although payouts are not guaranteed. Anchorage Digital, BitGo, and Fidelity Digital Assets would serve as custodians for the ETH and support staking operations.

Fidelity expects staking to begin "as soon as practicable" after the prospectus date, though the preliminary prospectus remains subject to change before the registration statement becomes effective.

A Growing Trend Among Ethereum ETF Issuers

Fidelity is not the first to pursue this path. Grayscale became the first US issuer to enable staking in spot crypto exchange-traded products in October 2025, while BlackRock launched its separate iShares Staked Ethereum Trust ETF (ETHB) in February 2026.Grayscale began distributing staking proceeds to shareholders in January 2026, and 21Shares also began distributing staking rewards from its Ethereum ETF products that month.

Adding staking to an established spot ETF like FETH could reshape competition among Ethereum ETF issuers by turning a price-tracking product into a yield-generating one.The move also signals growing regulatory comfort with staking inside existing grantor trust structures.

For now, the filing is preliminary and must become effective before any changes can take effect.

Sources:Fidelity Files to Add Staking to Ethereum ETF - CoinTelegraphFidelity Moves to Add Staking, Quarterly Payouts to Its Ethereum ETF FETH - DailyCoin