Fidelity Investments is seeking to add Ethereum staking to one of the largest spot ether funds in the United States, the Fidelity Ethereum Fund (FETH), in a move that could give holders an additional source of return and intensify competition among ether investment products.

According to a filing with the U.S. Securities and Exchange Commission, Fidelity would be permitted, under normal circumstances, to stake up to 100% of the fund’s eligible ether. The fund would still keep ether on hand to meet redemptions, expenses, and liquidity needs.

If approved, the change would allow a larger portion of FETH’s assets to participate in Ethereum’s proof-of-stake network rather than remain inactive in a staking account. Staking is central to Ethereum's security model since the network's 2022 transition away from mining: validators lock up ETH to process transactions and propose blocks, earning newly issued ETH as compensation. Fidelity said staking would begin as soon as practicable after the prospectus becomes effective. The filing remains preliminary, however, and the terms could still change before it takes effect.

Investors Would Receive 85% of Staking Rewards

Under Fidelity’s proposal, FETH would retain 85% of the “gross” staking rewards. The remaining 15% would be used for staking fees, including payments to the sponsor, custodians, and staking infrastructure providers.

That 85% figure refers to the portion of rewards the fund would keep after fees, not an 85% yield. Actual investor returns would depend on Ethereum staking rewards, the amount of ETH staked under the program, and the fund’s expenses.

Fidelity also plans to make cash distributions to net stakers on a quarterly basis, although those payments are not guaranteed. The amount distributed could change depending on staking conditions and fund costs.

Fidelity Enters a More Competitive Ethereum ETF Market

The move comes as the U.S. crypto ETF market continues to evolve, with several issuers seeking to add staking to their ether products. Spot ether ETFs launched without staking capabilities in mid-2024 after the SEC approved them following years of regulatory deliberation, leaving issuers to seek amendments as the regulatory landscape shifted.

Grayscale became the first U.S. issuer to allow staking in spot crypto exchange-traded products in October 2025. BlackRock later introduced its own Ethereum Trust ETF, iShares Staked Ethereum, in February 2026. Bitwise also sought to add staking to its Ethereum ETF but withdrew the proposal in September 2025.

FETH has also attracted significant investor interest. As of Aug. 11, the fund had recorded about $2.13 billion in cumulative net inflows since its launch in July 2024, according to Farside Investors.