Fidelity moves to add staking, quarterly payouts to near $900 million ether ETF

Fidelity is preparing to add staking and quarterly cash payouts to its Fidelity Ethereum Fund (FETH), one of the largest spot ether ETFs in the U.S.

FETH, with $898 million in net assets, could stake as much as 100% of its ether under normal conditions, though Fidelity set no minimum, according to an amended registration statement. The fund would keep some ETH available for redemptions, expenses and other liquidity needs.

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. 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 retain 85% of gross staking rewards, while the remaining 15% would go to the fund sponsor, custodians and node operators. Blockdaemon, Figment and Galaxy are named as the trust’s node operators.

Net staking rewards would first cover fund expenses and would then be used for quarterly cash distributions. Funds must distribute net staking rewards at least quarterly, according to the IRS rules.

The fund may also sell some ETH to raise cash for payouts, Fidelity said.