Fidelity is preparing to add Ethereum staking to its spot Ether exchange-traded fund, FETH, as competition in the U.S. spot Ether ETF market intensifies. Regulatory disclosures and market information show the asset manager is also considering a quarterly cash distribution structure tied to staking-related income.
The plan is not yet live. Fidelity said the service can only begin after the amended registration statement is approved and becomes effective.
Up to 100% of FETH’s ETH could be staked
In a Form 8-K filed on Aug. 7, 2026, Fidelity said it had amended the trust agreement and sponsor agreement for FETH to allow Ethereum staking.
The revised registration statement says the fund may stake as much as 100% of the ETH it holds. It does not, however, set a hard minimum staking ratio.
On reward allocation, the filing says 85% of staking rewards would accrue to FETH. The other 15% would be paid as fees to the sponsor, custodian, node operators, and other service providers.
Custody and validator operations are being arranged
Fidelity Digital Assets would remain the fund’s primary custodian. Fidelity has also signed related custody agreements with Anchorage Digital and BitGo.
The filing says Fidelity will retain control of the private keys, while selected professional node operators would run Ethereum validators. The current proposed list includes Blockdaemon, Figment, and Galaxy Digital Trading Cayman.
Quarterly cash payouts are planned, but the filing flags exposure risk
Beyond accumulating staking rewards, Fidelity said qualifying rewards may be converted into fiat and distributed to shareholders on a quarterly basis. The filing also states that such payments are not guaranteed.
Fidelity warned that it may sell staking rewards, or even ETH already held by the fund, to make those fiat distributions. That could reduce FETH’s effective exposure to underlying ETH and may affect the fund’s net asset value and share price performance.
The filing also points to risks tied to staking itself, including potential slashing, validator failures, and delays in Ethereum withdrawals.
FETH had about $2.12 billion in cumulative net inflows as of Aug. 11
According to SoSoValue, FETH had recorded about $2.12 billion in cumulative net inflows as of Aug. 11, 2026. Its net assets stood at about $898.71 million.
For now, Fidelity’s staking feature for FETH has not launched. It still requires regulatory clearance before it can take effect.