Cboe Proposes Adding Staking to Ethereum ETFs

The Cboe BZX exchange, a subsidiary of the Chicago Board Options Exchange Group, has filed two proposals with the U.S. Securities and Exchange Commission (SEC) to incorporate staking into Fidelity’s spot Ethereum exchange-traded fund (ETF) and the Franklin Ethereum ETF.

The 19b-4 documents, filed on March 11, seek approval to allow staking of Ether held by the Fidelity Ethereum Fund (FETH) and the Franklin Ethereum ETF (EZET). Crypto staking involves locking tokens on a blockchain network to help secure it and, in return, earn rewards.

If approved, the rule change would permit the ETFs to stake “all or a portion” of its Ether “through one or more trusted staking providers.” This move by Cboe BZX could set a precedent for other ETFs to integrate staking into their investment strategies.

Declining Numbers

Fidelity’s FETH ETF has faced recent headwinds, with its value dropping alongside the broader crypto market. Just this month, on March 5, 6 and 9, the fund recorded outflows of $26 million, $12 million and $24 million, respectively, according to SoSoValue data.

However, the ETF’s cumulative net inflows remain strong at $1.4 billion as of March 9, with total net assets currently standing at around $785 million.

Franklin’s EZET fund has recorded a cumulative net inflow of around $38 million, while its total net assets stand at $23 million.

Grayscale and 21Shares have also filed proposals to add staking to their Ethereum ETFs, highlighting a growing push for staking adoption in traditional finance (TradFi).

Ethereum (ETH) is currently trading at $1,900, down 5% in the past 24 hours and 28% over the past month, according to CoinGecko. This marks the first time ETH has fallen below $2,000 since 2023.