Major developments in cryptocurrency investment products continue to shape the financial landscape, with asset managers expanding their offerings to meet growing demand. Bitwise has launched a new exchange-traded fund (ETF) that tracks companies holding significant Bitcoin reserves, providing investors with indirect exposure to the cryptocurrency. At the same time, Cboe BZX is seeking regulatory approval to introduce staking into Fidelity’s Ethereum ETF (FETH), a move that could enhance returns for investors.
Cboe Pushes for Staking in Fidelity’s Ethereum ETF Amid SEC Review
Securities exchange Cboe BZX is making another push to integrate staking into Ethereum exchange-traded funds (ETFs) as it seeks approval from US regulators. According to a March 11 filing, Cboe BZX has formally requested permission from the US Securities and Exchange Commission (SEC) to incorporate staking into Fidelity’s Ethereum ETF (FETH).
If approved, this would mark a significant shift in the crypto ETF landscape, allowing institutional and retail investors to earn staking rewards directly from their ETF holdings. This filing follows Cboe’s previous efforts to enable staking for the 21Shares Core Ethereum ETF in February, signaling a broader strategy to integrate staking mechanisms into regulated investment vehicles.
Staking involves locking up ETH in a validator node to help secure the Ethereum blockchain, and in return, investors earn rewards. As of March 11, the estimated annual percentage rate (APR) for staking Ether is around 3.3%, denominated in ETH, according to Staking Rewards.
Cboe’s proposed rule change, if approved, would allow Fidelity Ethereum Fund to “stake, or cause to be staked, all or a portion of the Trust’s ether through one or more trusted staking providers.” Given that FETH currently manages nearly $1 billion in assets, introducing staking could significantly enhance returns for investors while maintaining exposure to Ethereum's price movements.
Ethereum is not the only blockchain network that offers staking. Other major cryptocurrencies, including Solana (SOL), also provide staking rewards, making the feature a critical component of yield generation in digital asset investing.
The SEC’s approval is still pending, and its decision will be closely watched by the crypto industry. Notably, since US President Donald Trump’s second term began on Jan. 20, the SEC appears to have softened its stance on cryptocurrency-related financial products.
In February, the SEC acknowledged over a dozen exchange filings related to crypto ETFs, including those focused on options trading, in-kind redemptions, and new types of altcoin funds. While regulatory uncertainty remains, this trend suggests a potential shift toward more accommodating crypto regulations under the new administration.
Cboe’s Broader Crypto ETF Expansion Plans
Beyond Ethereum staking, Cboe is actively expanding its crypto ETF offerings. The exchange has requested permission to list WisdomTree and Canary’s proposed XRP ETFs and facilitate in-kind creations and redemptions for Fidelity’s Bitcoin (BTC) and Ethereum (ETH) ETFs.
The SEC’s decision on these proposals could have far-reaching implications for the crypto investment landscape, particularly regarding staking and ETF structure modifications.
If the SEC approves staking for Fidelity’s Ethereum ETF, it would mark a watershed moment for crypto ETFs in the US. The decision could:
Encourage other ETF providers to integrate staking features into their offerings.
Boost institutional adoption of Ethereum ETFs by making them more attractive as passive income-generating investment products.
Support Ethereum’s staking ecosystem, as more ETH would be locked into the network, potentially reducing liquid supply and impacting price dynamics.
The SEC will need to evaluate the risks and regulatory implications of allowing staking in ETFs. One key consideration will be whether staking introduces additional counterparty risks or challenges related to custodianship and liquidity.
Investors and analysts are now awaiting the SEC’s response, which could set a precedent for how staking is integrated into traditional investment vehicles in the US financial markets.
Cboe’s push for staking in Fidelity’s Ethereum ETF represents a significant evolution in the crypto ETF space. As the SEC reviews the proposal, the decision could reshape institutional involvement in Ethereum staking and broaden the appeal of crypto-based ETFs.
Bitwise Launches ETF Tracking Companies with Large Bitcoin Holdings
In related news, asset management firm Bitwise has launched an exchange-traded fund (ETF) focused on companies that hold large Bitcoin (BTC) treasuries, the firm announced on March 11.
The newly introduced Bitwise Bitcoin Standard Corporations ETF (OWNB) is designed to track an equity index comprising companies that hold at least 1,000 BTC in their corporate treasuries. This ETF represents another step in bridging traditional equity markets with the Bitcoin ecosystem, as more publicly traded firms recognize Bitcoin as a strategic reserve asset.
“A lot of people wonder: Why do companies buy and hold Bitcoin? The answer is simple: For the exact same reasons people do,” said Matt Hougan, Bitwise’s Chief Investment Officer. “These companies perceive Bitcoin as a strategic reserve asset that’s liquid and scarce—and not subject to the whims or money printing of any government.”
OWNB is designed to give investors exposure to publicly traded firms that hold large amounts of Bitcoin. The index is weighted based on the amount of BTC held, with the largest single holding capped at 20%.
As of March 11, the ETF’s top holdings include:
MicroStrategy (MSTR) – The software company turned Bitcoin investment vehicle led by Michael Saylor remains the largest corporate holder of BTC, with over 214,000 BTC, valued at more than $41 billion.
Bitcoin mining companies, including:
Marathon Digital Holdings (MARA)
CleanSpark (CLSK)
Riot Platforms (RIOT)
Other firms with notable Bitcoin holdings, such as:
Galaxy Digital (GLXY), a crypto-focused investment firm.
Boyaa Interactive, a gaming company.
The launch of OWNB comes at a time when corporate Bitcoin holdings are growing rapidly. According to BitcoinTreasuries.NET, as of March 11, companies collectively hold over $54 billion worth of BTC, reflecting a sharp increase in corporate interest in Bitcoin as a store of value.
Among these corporate Bitcoin holders, MicroStrategy remains the dominant force, holding the lion’s share of $41 billion in BTC. MicroStrategy's stock has soared more than 350% in 2024, closely tracking Bitcoin’s price appreciation and solidifying its position as a de facto Bitcoin fund for institutional investors.
The trend of publicly traded firms accumulating Bitcoin stems from multiple factors:
Hedge Against Inflation – With growing concerns over inflation and fiat currency devaluation, companies see Bitcoin as a hedge against monetary expansion and currency debasement.
Scarcity and Digital Gold Narrative – Bitcoin’s fixed supply of 21 million coins makes it a scarce asset that corporations view as a store of value similar to gold.
Institutional Acceptance of Bitcoin – As Bitcoin gains recognition in traditional finance, corporations are allocating reserves into BTC to diversify their balance sheets.
Regulatory Clarity in the US – The SEC’s approval of Bitcoin ETFs in early 2024 has bolstered corporate confidence in holding BTC.
Other Bitcoin Treasury ETFs on the Horizon
Bitwise is not the only asset manager looking to capitalize on the growing trend of corporate Bitcoin treasuries. Other firms have been developing similar investment products:
Strive’s "Bitcoin Bond" ETF – In December, Strive Asset Management, founded by former US presidential candidate Vivek Ramaswamy, sought SEC approval for an ETF investing in convertible bonds issued by corporate Bitcoin holders.
REX Shares Bitcoin Treasury ETF – On March 10, asset manager REX Shares announced plans to launch its own ETF targeting companies with Bitcoin reserves.
The introduction of the Bitwise Bitcoin Standard Corporations ETF (OWNB) reflects a growing trend in institutional Bitcoin adoption. As more publicly traded firms allocate Bitcoin to their balance sheets, investors now have a regulated way to gain exposure to BTC-heavy corporations without directly buying Bitcoin.
The success of this ETF will largely depend on continued corporate interest in Bitcoin and regulatory developments surrounding crypto-related financial products. However, one thing is clear: corporate Bitcoin treasuries are here to stay, and investors now have a new way to tap into this emerging sector.
