FETH: the most ambitious staking plan in the ether category, still sitting at the SEC

What FETH is

FETH is Fidelity's spot ether fund, listed on Cboe BZX since 22 July 2024. It holds ether directly, charges a 0.25% sponsor fee, and as of today does not stake. It held $1.35bn on 2 September 2026, which makes it the second-largest US spot ether product and puts it comfortably ahead of everything except BlackRock's ETHA.

Structurally it is unremarkable and that is fine — the wrapper is standardised across the whole spot ether fund list, just as it is across the bitcoin funds. Two things make FETH worth its own page. One is who holds the coins. The other is a document sitting at the SEC that would, if it goes effective, make FETH the most aggressively staked ether fund in the United States.

Fidelity holds its own ether — and that is unusual

Almost every US crypto ETF outsources custody. Roughly 80% of all bitcoin held inside US ETFs sits with Coinbase Custody, and the ether side follows a similar pattern. Fidelity does not participate in that. Its crypto funds are custodied by Fidelity Digital Assets, an affiliate of the sponsor, which means the firm that runs the fund is also the firm that holds the coins.

Whether that is better depends on which risk you are pricing. It removes an external counterparty and the concentration exposure that comes with the industry's default provider. It also removes the separation between sponsor and custodian that some investors specifically want, and it means a single organisation's operational failure would touch both roles at once. There is no free lunch here — it is a different arrangement, not a strictly safer one.

The same point applies verbatim to Fidelity's bitcoin fund, and we make the case in more detail on the FBTC profile. The two funds are the only US crypto ETFs with in-house custody by a sponsor affiliate. The alternative structural answer to custody concentration is ARKB's three-way split across Anchorage Digital Bank, BitGo and Coinbase Custody. Everything else in the category effectively accepts the concentration. Our issuers and custodians page maps who holds what.

Second place

The staking amendment, in detail — and what is not settled

Fidelity filed an amendment that would allow FETH to stake its ether. The paper trail: the filing was accepted on 24 July 2026, made public on 10 August, and amended on 11 August 2026. The terms are the striking part. It would permit staking of up to 100% of the fund's holdings, with rewards paid out in quarterly cash distributions.

No other US ether fund has filed for a ceiling that high. BlackRock's live staked wrapper stakes 70–95%. 21Shares' TETH stakes 40–70%. A 100% ceiling is not the same as an intention to stake everything — a fund still has to hold an unstaked buffer to meet redemptions in practice — but the permission itself is the widest on the table.

And it is not effective. It was explicitly still pre-effective on 14 August 2026, and we found no evidence of effectiveness by 2 September 2026. FETH is one of five staking amendments outstanding, alongside Franklin, Invesco, VanEck and BlackRock's own ETHA. None of the five is confirmed effective. Forecasts circulating in May 2026 expected several of these to clear by the end of August; that does not obviously appear to have happened, which is a useful reminder about how much weight to put on approval timelines from anyone who is not the SEC.

How the funds that already stake actually pay you

"Up to 100% staked with quarterly cash distributions" only means something if you know what the live alternatives do. There are four distinct models running in the US market right now, and they hand very different amounts of the reward to the shareholder.

Grayscale ETHE — cash, monthly, first to market

The Grayscale Ethereum Staking ETF was the first US crypto ETP to distribute staking rewards in cash: $0.08318 per share, ex-date 5 January 2026, and monthly since. It also charges 2.50%, the highest fee in the category by a wide margin, which consumes a great deal of what the staking generates.

BlackRock ETHB — 82% out, 18% retained

The iShares Staked Ethereum Trust ETF stakes 70–95% through Figment, Galaxy and Attestant, distributes 82% of gross rewards monthly and keeps 18%. That retained share is the fund's real cost and appears in no expense ratio.

21Shares TETH — 40–70% staked, at least quarterly

Stakes a smaller share and distributes cash at least quarterly. Its headline 0.21% fee is fully waived to 8 October 2026 — which, given how these waivers tend to end, is a date worth writing down rather than a permanent feature.

Grayscale Mini ETH — accrued, not distributed

The Ethereum Staking Mini ETF appears to accrue rewards into net asset value rather than paying them out. Economically similar, but you see it in the share price rather than in your cash account — which has real consequences for how and when it is taxed.

Against that field, quarterly cash from FETH would be a middling distribution frequency paired with the highest permitted staking ratio. The number that would decide whether it is competitive — Fidelity's own retained share of gross rewards — is the one we cannot report, because it has not been established in anything we can verify.

Second place, and how far back it is

There is no dressing this up. FETH held $1.35bn on 2 September 2026; ETHA held $8.38bn on the same day. That is roughly one sixth, and both funds charge exactly the same 0.25%. Fidelity launched two days earlier than BlackRock, has a household brand, an enormous captive brokerage platform and in-house custody — and still finished a distant second.

This is now the standard shape of every US crypto ETF category. IBIT holds around 60% of the spot bitcoin market. ETHA holds a similar share of ether. Bitwise's BSOL leads Solana by a similar margin. Liquidity begets liquidity, and the fund that gets ahead early tends to stay ahead regardless of the merits of the runner-up.

What being second actually costs you as a shareholder is modest but real: slightly wider quotes, less options depth, and marginally more risk that the product gets rationalised if the sponsor's crypto range is ever reorganised. At $1.35bn FETH is nowhere near the danger zone — Hashdex's DEFI closed in August 2026 holding under $15m, which is a different universe — but scale is a genuine input into fund selection. We work through how to weigh it on the crypto ETF picks page.

Who FETH suits

FETH is a good fit if you already bank with Fidelity and want ether inside an account you already hold, if you specifically want a fund whose sponsor custodies its own assets, or if you want to avoid concentrating your crypto exposure in a single issuer alongside a bitcoin position. It is also a reasonable pick if you would like exposure to a staking structure later without adopting validator risk today.

It is not the right pick if cost is your only lever — Morgan Stanley's MSSE at 0.14% moved the ether fee floor in July 2026, and Bitwise's ETHW at 0.20% also undercuts. It is not right if you want staking income now, where the live options are ETHE, the Grayscale Mini, ETHB and TETH. And it is not right if you want ether you can actually use, in which case a fund of any kind is the wrong instrument. The mechanics of buying any of these tickers are the same, and the step-by-step buying guide covers them, as does the wider crypto ETF directory.