Ethereum (ETH) is showing signs of recovery, trading around $1,940 and up 3% on the day following significant regulatory developments in the U.S. exchange-traded fund (ETF) landscape. The recent filing by Cboe BZX Exchange with the Securities and Exchange Commission (SEC) has reignited investor optimism—particularly around the potential for staking within spot Ethereum ETFs. This move could reshape how investors engage with Ethereum through traditional financial vehicles.
Fidelity Moves Forward with Staking Proposal for ETH ETF
Cboe BZX Exchange submitted a proposed rule change—known as a 19b-4 filing—to the SEC on Tuesday, seeking approval for Fidelity to enable staking in its spot Ethereum ETF, officially named the Fidelity Ethereum Fund (FETH).
The filing states:
"Based on discussions with the Sponsor, the Exchange proposes to amend several portions of the ETH ETP Amendment No. 2, as amended, in order to allow the staking of ether held by the Trust."
This means that if approved, Fidelity would be able to lock up ETH from its ETF holdings to participate in Ethereum’s consensus mechanism, earning yield for investors while enhancing network security.
👉 Discover how staking-powered ETFs could transform crypto investing.
Fidelity isn’t alone in this push. Grayscale and 21Shares have also filed similar applications with the SEC, signaling growing institutional demand for staking-enabled crypto products. These coordinated efforts reflect a strategic shift in how asset managers view Ethereum—not just as a store of value but as an income-generating digital asset.
Why Staking Matters for Ethereum ETFs
Staking allows investors to earn passive returns by locking up their ETH to help validate transactions on the Ethereum blockchain. Since “The Merge” in September 2022, Ethereum has operated under a Proof-of-Stake (PoS) consensus model, eliminating energy-intensive mining in favor of token-based validation.
For ETF issuers, enabling staking transforms their funds from static holdings into yield-bearing instruments—potentially increasing their attractiveness compared to non-staking alternatives.
Before Ethereum ETFs were approved in July 2024, most sponsors removed staking provisions from their initial filings due to concerns that then-SEC Chair Gary Gensler was skeptical of the feature. However, recent leadership changes at the SEC—including Gensler’s departure on January 20—and a more crypto-friendly administration under acting Chair Mark Uyeda have opened the door for reconsideration.
Nate Geraci, President of The ETF Store, has suggested that U.S. spot Ethereum ETFs could outperform Bitcoin ETFs if staking is permitted—highlighting the competitive advantage income generation brings in traditional finance.
Despite this momentum, Ethereum ETFs saw $37.50 million in outflows on Monday, marking four consecutive days of negative net flows. This short-term selling pressure contrasts with longer-term bullish sentiment driven by regulatory evolution and macro adoption trends.
Ethereum Price Analysis: Key Levels to Watch
As of now, ETH is consolidating near $1,940 after a volatile period marked by heavy liquidations. According to Coinglass data, **$131.39 million in futures positions were liquidated in the past 24 hours**, with longs accounting for $83.31 million and shorts $48.09 million—indicating strong two-way trading activity.
Support and Resistance Outlook
Ethereum found critical support near **$1,750**, a level derived from projecting downward the percentage move between the $2,850 and $2,200 range—a key rectangular channel visible on the daily chart.
- Bullish case: If ETH sustains above $1,950 and regains the $2,200 psychological level, it could retest the major resistance at $2,850, which represents a multi-month high.
- Bearish risk: A daily close below $1,500** would invalidate the current recovery thesis and could trigger a deeper correction toward **$1,000, especially if broader market conditions deteriorate.
Technical indicators are showing early signs of stabilization:
- The Relative Strength Index (RSI) has climbed out of oversold territory.
- The Stochastic Oscillator (Stoch) is turning upward, suggesting diminishing bearish momentum.
These signals support the idea that selling pressure may be exhausting, setting the stage for a potential rebound if volume picks up.
👉 Learn how technical patterns can signal the next big ETH move.
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Frequently Asked Questions (FAQs)
What is Ethereum?
Ethereum is a decentralized, open-source blockchain platform designed to support smart contracts and decentralized applications (dApps). Its native cryptocurrency, Ether (ETH), ranks as the second-largest digital asset by market capitalization and serves as the primary fuel for transactions and computations on the network.
What is staking in Ethereum?
Staking involves locking up ETH to become a validator on the Ethereum network. Validators propose and attest to new blocks, helping secure the blockchain in exchange for rewards paid in ETH. Since transitioning to Proof-of-Stake in 2022 (“The Merge”), staking has become central to Ethereum’s operation and offers investors a way to earn yield on their holdings.
Can you stake Ethereum in an ETF?
Currently, most U.S.-listed spot Ethereum ETFs do not offer staking. However, Fidelity, Grayscale, and 21Shares have all filed proposals with the SEC to introduce staking functionality. If approved, these ETFs would allow investors to earn staking rewards indirectly through regulated financial products—marking a major step toward mainstream adoption.
What is the significance of Fidelity’s ETF staking filing?
Fidelity’s move signals strong institutional interest in integrating native crypto features into traditional investment vehicles. Approval could set a precedent for other asset managers and increase demand for ETH-backed ETFs by offering yield—a feature absent in Bitcoin ETFs.
What does gas mean on Ethereum?
Gas refers to the fee required to conduct any transaction or execute a smart contract on Ethereum. It’s priced in small fractions of ETH (gwei) and varies based on network congestion. High gas fees during peak usage times can impact user experience but also incentivize validators to process transactions efficiently.
How might SEC leadership changes affect crypto regulation?
With former Chair Gary Gensler stepping down and a new administration under acting Chair Mark Uyeda taking over, there’s growing speculation about a more balanced and innovation-friendly regulatory approach. This shift could accelerate approvals for advanced crypto products like staking-enabled ETFs.
👉 Stay ahead of regulatory shifts shaping tomorrow’s crypto markets.
Final Outlook: Is Ethereum Poised for a Breakout?
While short-term price action remains sensitive to macro sentiment and ETF flows, the long-term trajectory for Ethereum appears constructive. Regulatory momentum around staking-enabled ETFs suggests increasing acceptance of crypto-native features within traditional finance.
If ETH breaks and holds above $2,200, the path toward $2,850 becomes viable. Conversely, failure to defend $1,750 could lead to further downside pressure. Investors should monitor both technical levels and regulatory updates closely.
With institutional innovation accelerating and core network fundamentals strengthening, Ethereum continues to position itself as more than just a cryptocurrency—it's evolving into a foundational layer for next-generation financial infrastructure.