Loyalty Space Ethereum ETF proposal has been updated to include stocks.
Financial services firm Fidelity is seeking permission to share a portion of Ether (ETH) held by an Ether exchange-traded fund (ETF) in a bid to provide investors with additional income.
In a March 18 filing with the U.S. Securities and Exchange Commission in a 19b-4 amendment, the Fidelity ETF wrote that if approved, the fund would hold an undisclosed amount of its assets through one or more fiduciary stock providers.
“The Sponsor may, from time to time, distribute a portion of the funds through one or more Fidelity Stakeholders,” Fidelity said in its revised application.
Fidelity has not disclosed a specific stock provider. There are several Ether stake providers in the market today, including Lido DAO, RocketPool, and StakeWise.
The price of Lido DAO — the largest provider of liquid Ethereum shares — rose from $2.48 to $2.56 on the news before settling back to $2.49, according to TradingView data.
However, Lido DAO has fallen by 27% in the past week, amid a broader return for Ether and several tokens in the ecosystem.
Fidelity is one of eight funders that have filed an Ether ETF application – currently awaiting approval by the SEC.
On February 8, Arc 21 Shares added plans to take a portion of the proposed fund's ETH. Days later, Franklin Templeton entered the competition for the spot Ether ETF, also hoping to share a portion of the ETF Ether to generate additional income.
Related: Senators push SEC's Gensler not to approve any more crypto ETFs
It launched on November 18 last year and joins other firms including the world's largest investment firm BlackRock, Cathy Wood's ARK Invest and crypto asset manager Grayscale.
If the SEC doesn't approve all eight ETFs by Van Eck's deadline of May 23, all prospective issuers will have to refile their applications the following day.
Bloomberg ETF analyst Eric Balchunas said the chance of the Ether ETF getting approved by Van Eck's deadline in May sits at just 35 percent.
In January, Blachunas pegged the chance of approval at 70%, but told Cointelegraph that the SEC's “radio silence” on hedge funds and the political backlash against Chairman Gary Gensler were bad signs for the approval process.
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