Fidelity has asked the U.S. Securities and Exchange Commission to allow its spot Ethereum exchange-traded fund to stake as much as 100% of its ETH holdings, a proposal that would give one of the largest U.S. asset managers a route to pass Ethereum network rewards into a regulated fund structure.
The amended registration statement, filed on Aug. 11 for the Fidelity Ethereum Fund, or FETH, says the fund could stake “all or a portion” of its ether under normal conditions and sets no minimum amount that must be committed. If approved, the change would move FETH beyond simple ETH price exposure and tie a portion of the fund’s returns to Ethereum’s proof-of-stake validation system.
Staking involves locking ETH into the Ethereum network to help validate transactions and secure the blockchain in return for rewards. For a spot ETF, the process introduces practical questions around custody, liquidity, lock-up periods, slashing risks and the treatment of staking income. Fidelity’s filing places those operational issues directly before the SEC as issuers seek to make Ethereum funds more closely reflect the economics of holding the asset on-chain.
Staking participation reaches new high
The filing arrives as the share of Ethereum committed to staking continues to rise. On-chain figures cited in the supplied market data put the proportion of staked ETH at 34.4%, a record level and up from roughly 30% at the start of the year.
A growing staking ratio can reduce the amount of ETH readily available for trading, although it does not automatically determine market prices. It also makes the treatment of staking rewards more consequential for large fund products. An ETF that cannot stake may provide different economics from direct ETH ownership, particularly during periods when staking yields remain meaningful.
Fidelity’s proposed approach would not require the fund to stake every ETH it holds. That flexibility could help the issuer retain liquid assets for share creations and redemptions while placing part of the portfolio into Ethereum’s validator system. The filing’s reference to staking up to the full holding gives Fidelity broad discretion if regulators permit the structure.
The SEC has previously faced questions over whether staking services and related rewards create regulatory obligations beyond those associated with holding ETH itself. The agency’s response to Fidelity’s amended filing will therefore be watched by other Ethereum-fund issuers considering similar additions.
Security concerns intensify custody debate
The ETF filing also comes amid renewed scrutiny of self-custody practices following reports that approximately 2,100 BTC, valued at nearly $130 million, was stolen in an exploit involving Coldcard hardware-wallet firmware.
The reported vulnerability involved a weak software random-number generator that allegedly reduced wallet key strength to about 40 bits, making the resulting keys far easier to guess than properly generated cryptographic keys. Coldcard users were among the wallet holders reported to have moved assets after the incident, alongside Ledger and Trezor users taking similar precautions.
Neuman, who commented on the wallet movements, said some transfers were linked to users shifting funds into multisignature arrangements. Multisignature custody requires more than one approval to move funds, reducing the risk that a single compromised device, key or recovery phrase can unlock an entire holding.
Blockchain data around the reported breach showed long-term holder wallets moving about 233,000 BTC, worth roughly $15 billion, during the surrounding period. About 22,000 BTC was also sent to trading platforms, according to the supplied on-chain figures. Large transfers can reflect many motives, including upgrades to custody arrangements, internal reorganizations and changes in trading plans, rather than a single directional market view.
Separately, Gerovich said his company transferred 5,014 BTC between custody addresses over the past 24 hours, reporting total holdings of 43,000 BTC after the move. He put the transaction’s value at $322 million and said total Bitcoin network fees were about $8, illustrating the low transaction cost that can accompany a high-value on-chain transfer when blockspace demand is manageable.
Tech positioning adds pressure to risk markets
Digital-asset prices were mixed during the 24-hour period covered by the supplied market figures. Bitcoin fell 0.54% and Ether slipped 0.26%, while TRON’s TRX rose 0.45% and Zcash’s ZEC gained 1.60%. Among heavily traded tokens, BABY dropped 21.61%, Uniswap’s UNI fell 6.44%, and Dogecoin declined 3.26%.
The uneven performance coincided with a sharp move in Nasdaq futures positioning. Goldman Sachs data cited by The Kobeissi Letter showed institutional participants selling $21.6 billion of Nasdaq futures in the week ending Aug. 4. Short sales accounted for 72% of that activity, including $11.9 billion from hedge funds and $7.4 billion from asset managers.
Net institutional positioning in Nasdaq futures fell to negative $5 billion, according to the same data, the first negative reading since May 2025 and a sharp reversal from a $54 billion peak in October 2025. The figures cover hedge funds, asset managers and other institutional participants.
Tech-equity derivatives and cryptocurrencies do not move in lockstep, but both can respond to shifts in leverage, liquidity and appetite for higher-volatility assets. The futures data therefore adds a more cautious macro backdrop to a crypto market where individual tokens posted widely divergent daily moves.
South Korean equities moved in the opposite direction. The KOSPI rose more than 4% in morning trading and stood about 23% above its July 30 low, meeting the conventional threshold for a technical bull market. Samsung Electronics gained more than 4%, while SK Hynix rose more than 7%, extending a rally in major semiconductor names.
Stablecoins and AI move closer together
Brian Armstrong said the company he leads plans to support artificial-intelligence agents as customers and enable businesses to accept stablecoin payments from them. He said AI agents would be able to complete checkout without merchants needing additional setup.
The proposal points toward a payment model in which software agents can pay for computing resources, data access, subscriptions or other online services using stablecoins. Adoption would depend on merchants, wallet providers and compliance systems supporting the same payment rails, but it would create a practical use case beyond speculative token trading.
DeepSeek also moved its V4 Pro model from preview to a full release under the version DeepSeek-V4-Pro-0813. The company listed prices per 1 million tokens at 0.025 yuan for cache-hit input, 3 yuan for cache-miss input and 6 yuan for output. Its V4-Flash model was listed at 0.02 yuan, 1 yuan and 2 yuan respectively.
Hawaii prepares crypto ATM ban
Hawaii will ban the ownership, operation and management of kiosks that exchange U.S. currency for digital financial assets beginning Oct. 1 under House Bill 1642, signed by Governor Josh Green in July.
The legislation cites FBI Internet Crime Complaint Center data showing more than $11 billion in U.S. digital-asset-related scam losses during 2025. It also cites 826 Hawaii-related complaints involving about $80 million in losses. Minnesota, Tennessee and Indiana were identified as states that had previously enacted full crypto ATM bans.
The measure focuses on physical kiosk operators rather than digital-asset ownership, but it removes a cash-to-crypto access point that has become a frequent focus of fraud complaints. As large fund issuers pursue staking features and companies test stablecoin payments for automated software, state policymakers are tightening controls over one of cryptocurrency’s most consumer-facing cash channels.
Curious how ETH staking works behind these filings? Explore institutional staking basics in this detailed guide today.
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