USDFidelity Plans Ethereum ETF Staking and Quarterly Cash Distributions
FETH would retain most staking rewards while preserving Ether for liquidity needs
TL;DR
- Fidelity plans to add Ethereum staking and quarterly cash distributions to its Fidelity Ethereum Fund.
- The fund could stake nearly its entire Ether portfolio but would keep some ETH available for liquidity needs.
- Cash distributions could require sales of underlying ETH, reducing FETH's direct Ether exposure.
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Fidelity is preparing to add Ethereum staking and quarterly cash distributions to the Fidelity Ethereum Fund, or FETH, under amended fund agreements disclosed on August 7, 2026. Staking had not started when the development was reported on August 12, 2026, and Fidelity said the feature would begin only after its amended registration statement becomes effective.
Fidelity sets staking structure for FETH
Fidelity amended FETH's trust and sponsor agreements to allow staking and also established custody agreements with Anchorage Digital and BitGo. Fidelity Digital Assets will continue serving as the fund's custodian. Fidelity will retain control of the private keys, while proposed node operators Blockdaemon, Figment and Galaxy Digital Trading Cayman would operate Ethereum validators for the fund.
The amended registration statement gives Fidelity considerable flexibility over how much of the fund's Ether can be staked while requiring no minimum allocation. FETH would retain some ETH outside staking to meet redemptions, expenses and other liquidity requirements.
The portion of staking rewards not retained by FETH would go to the sponsor, custodians, node operators and other service providers. Net rewards would first cover fund expenses, with the remaining amount converted into fiat and distributed to shareholders quarterly. Those distributions are not guaranteed.
Fidelity may sell staking rewards or existing Ether holdings when necessary to fund the cash payments. Selling underlying ETH for that purpose would reduce FETH's Ether exposure and could affect its net asset value and share price. The staking structure also introduces risks including slashing, validator failure and withdrawal delays.
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FETH approaches $900 million in net assets
FETH had accumulated substantial assets and investor inflows before the proposed staking feature. SoSoValue data showed the following fund metrics as of August 11, 2026:
FETH was the fourth-largest Ethereum ETF by assets under management. Fidelity's planned staking addition follows BlackRock's launch of its staking Ethereum ETF, ETHB, in March 2026, placing the two asset managers among issuers offering or preparing products that combine exchange-traded Ether exposure with Ethereum staking.
ETHB was the fifth-largest Ethereum ETF at the time of the cited data. Fidelity's FETH remained larger than ETHB by net assets, while BlackRock's main Ethereum fund remained substantially larger than Fidelity's vehicle.
Fidelity has also expanded its use of Ethereum beyond the ETF market. Earlier in 2026, the company selected Ethereum for its Fidelity Digital Dollar, or FIDD, a stablecoin designed to maintain a 1:1 peg to the U.S. dollar and be backed by reserves.
FAQ
When can FETH begin staking?
After Fidelity's amended registration statement becomes effective.
Who would operate FETH's Ethereum validators?
Blockdaemon, Figment and Galaxy Digital Trading Cayman are the proposed node operators.
Why would FETH keep some ETH unstaked?
To support redemptions, expenses and other liquidity needs.
How would shareholders receive staking income?
Eligible net rewards would be converted into fiat and distributed quarterly in cash.
This article has been refined and enhanced by ChatGPT.
