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Fidelity’s Ethereum ETF Proposal
Fidelity Investments, boasting $4.5 trillion in assets under management, has formally submitted an S-1 form to the US Securities and Exchange Commission (SEC). The firm unveiled plans to launch a spot Ethereum exchange-traded fund (ETF).
What’s unique about this ETF is the inclusion of a staking feature, a first in the ETF realm. With the notable achievements of the first set of spot BTC ETFs approved in the US, industry observers eagerly anticipate the next spot cryptocurrency ETF that the US SEC would approve.
Industry analysts opined that the success of the spot BTC ETFs contributed significantly to BTC’s price rise to a new all-time high (ATH) of $73,000 achieved earlier this month. With its robust intelligent contract capabilities and widespread adoption, Ethereum frequently finds itself at the top of the list of potential candidates.
Innovative Features
The proposed Fidelity Ethereum Fund aims to issue shares trading on the Chicago Board Options Exchange (CBOE), exposing investors to Ether’s performance. Through its staking feature, the fund’s investors can lock up their Ethereum holdings to participate in the network’s consensus mechanism and earn rewards.
This will give them an additional avenue for diversifying their investment portfolio. The company’s filing outlined that the Fidelity Ethereum Fund will mirror Ether’s performance.
This performance is measured through the Fidelity Ethereum Reference Rate, with adjustments made for the fund’s financial obligations. Recall that Fidelity, alongside other financial giants such as VanEck, BlackRock, and ARK Invest, initially filed for a spot Ethereum ETF in November 2023.
Regulatory Hurdles And Industry Optimism
Meanwhile, the SEC’s concerns regarding Ethereum’s classification status as a security casts a shadow of uncertainty over the prospects of the regulator approving spot Ethereum ETFs. Accordingly, many top industry insiders, including GrayScale’s Chief Legal Officer Craig Salm, remain cautiously optimistic.
Nevertheless, Salm believes that negotiations and groundwork could pave the way for a smoother approval process for Ethereum ETFs. Salm pointed out that all the pertinent issues have been addressed as they are essentially the same as those for spot Bitcoin ETFs.
The only distinction lies in the assets the ETF holds, with one holding Bitcoin and the other holding Ethereum. Consequently, Salm implies that issuers may encounter fewer challenges this time around.
21Shares Launches Toncoin Staking ETP
Meanwhile, 21Shares has unveiled its latest offering: the Toncoin Staking Exchange-Traded Product (ETP). The product, listed under the ticker TONN on the SIX Swiss Exchange, promises investors a convenient gateway into the staking ecosystem.
With an initial investment of $25 million, 21Shares aims to capitalize on the growing interest in staking cryptocurrencies. Notably, the Toncoin Staking ETP has a management fee of 2.5% per annum, offering investors exposure to Toncoin while leveraging the liquidity and accessibility of traditional financial markets.
However, the Toncoin Staking ETP announcement coincided with a modest downturn in Toncoin’s price. At the time of writing, Toncoin is trading at $4.88, a 1.31% decline over the past 24 hours. However, it’s still up 18.7% and 94.5% over the past week and month.
Recent Initiatives And Partnerships
In February, Toncoin initiated a 30 million TON distribution program to incentivize user participation in ecosystem projects. Moreover, Toncoin’s partnership with Binance in early March further underscored its growing prominence in the crypto landscape.
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