Asset management giant Fidelity has submitted a revised application to the US Securities and Exchange Commission (SEC) for its Ethereum spot ETF, proposing to allow the ETF to “stake” a portion of its ETH assets, which caused the price of LidoDAO (LDO) to briefly surge by 11% in the early morning.
Fidelity, with assets under management of $4.5 trillion, submitted the modified ETH application to the SEC on the 19th, which added a description of staking and aimed to generate additional income for the fund.
In the latest submission of the 19b-4 form, Fidelity stated:
Although Fidelity did not specifically name the staking service provider in the document, this news caused the price of Lido, the largest Ethereum liquidity staking protocol, to surge by nearly 11% in the early morning, reaching a high of nearly $2.7. However, it quickly followed the market’s pullback. At the time of writing, it was reported at $2.45, with a narrowing 24-hour decrease of 9.4%.
At the same time, RocketPool (RPL), another well-known Ethereum staking service provider, also experienced a maximum increase of more than 11% and surged above $30 briefly. It is currently reported at $28.31, with a 1.9% decrease in the past 24 hours.
LDO surged nearly 11%. Source: Trading View
Will the Ethereum spot ETF be difficult to pass on May 23rd?
Fidelity’s plan to include staking measures in its own Ethereum spot ETF is a major positive for Ethereum staking service providers. However, it is worth noting that since Fidelity first submitted its application in November last year, the SEC has twice postponed its decision on the Ethereum spot ETFs of Fidelity and BlackRock, another giant in the industry.
Timeline of 8 Ethereum spot ETF-related applications. Source: Bloomberg
Some experts have turned pessimistic about the expected approval of the Ethereum spot ETF by the SEC before the key date of May 23rd. Last week, Fox Business reporter Eleanor Terrett revealed that the SEC has not been pushing the approval process forward meaningfully, as it did with the Bitcoin spot ETF approval. At the same time, Senator Elizabeth Warren, a well-known anti-cryptocurrency figure, is leading the opposition to the relevant applications.
Eric Balchunas, a senior ETF analyst at Bloomberg, also believed this month that the chances of approval in May are not optimistic because SEC staff have not given any comments to the issuers yet.
Analysts at crypto exchange BloFin recently listed the main reasons why the SEC may reject the Ethereum spot ETF in May in their report, citing “ETH securitization risks” as the primary reason. The analysts also believe that the risk of price manipulation of Ethereum is higher than that of Bitcoin, and the PoS mechanism of Ethereum raises doubts for the SEC regarding approval.
Further reading:
Should we prepare for the rejection of the Ethereum spot ETF? Three main reasons the SEC may reject it.
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