Fidelity is preparing to add staking and quarterly cash payouts to its Fidelity Ethereum Fund (FETH), which holds $898 million in net assets. The fund could stake up to 100% of its ether, with 85% of gross staking rewards kept for the fund and the rest going to service providers.
Fidelity is moving to add staking and quarterly cash distributions to its Fidelity Ethereum Fund (FETH), which has $898 million in net assets, one of the largest spot ether ETFs in the United States.
FETH could stake up to 100% of its ether
According to an amended registration statement, FETH could stake as much as 100% of its ether under normal conditions, though Fidelity set no minimum. The fund would still keep some ETH available for redemptions, expenses and other liquidity needs. It may also sell some ETH to raise cash for the payouts.
An IRS rule opened the door for fund staking
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. Funds must distribute net staking rewards at least quarterly under those rules, and net rewards would first go toward covering fund expenses before any payout to investors.
Fidelity would join Grayscale and 21Shares in adding staking to existing ether funds. BlackRock took a different route by introducing a separate staking product.
Fidelity would keep 85% of the staking rewards
The fund would retain 85% of gross staking rewards, with the remaining 15% going to the fund sponsor, custodians and node operators. Blockdaemon, Figment and Galaxy are named as the trust's node operators.
Source: CoinDesk
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