Ethereum (ETH) gains momentum, Fidelity seeks SEC approval for ETF pledge

Key Points

Fidelity applies for pledge feature of Ethereum ETF

Fidelity, a large asset manager, has filed a document with the U.S. Securities and Exchange Commission seeking to allow its Ethereum ETF to include pledge feature. The ETF currently manages more than $898 million in assets. According to the content of the document, 85% of the pledge proceeds will belong to the fund, and the rest will be used to pay the operating expenses of sponsors, custodians and verifiers.

EIP-8363 proposal sparks controversy

The controversy surrounding EIP-8363 continues to heat up, and the proposed change to the agreement will reduce the pledge yield when the total pledge ETH exceeds 50% of supply.

Large investors are actively attracting funds at the support level

Large investors are still actively trading. Bitmine recently purchased 7391 ETH units, worth approximately US$14 million, when the price fell back to US$1850.

Technical analysis

Ethereum is sorting between key moving averages and facing resistance around $1922, while a bullish continuation pattern suggests a possible move to $2500.

Fidelity submits pledge application for Ethereum ETF

Investment giant Fidelity has filed regulatory documents with the U.S. Securities and Exchange Commission requesting authorization for its Fidelity Ethereum Fund (FETH) to include pledge functions. The exchange-traded fund currently manages total assets of more than $898 million.

According to document details, the fund allows most of its Ethereum positions to be pledged during normal market operations. Three institutional custodians-Anchorage Digital Bank, BitGo and Fidelity Digital Assets-will be responsible for managing the pledge infrastructure and operations.

The proposed income allocation model attributes 85% of total pledge income to the fund itself. The remainder will be distributed as compensation to sponsors , hosting partners and node verifiers. After payment of operating expenses, any remaining pledge income will be distributed to shareholders in cash on a quarterly basis and in accordance with IRS Revenue Procedure Guidelines 2025-31.

EIP-8363 proposal sparks controversy

This regulatory submission comes amid heated discussions around EIP-8363 within the Ethereum ecosystem. The controversial improvement proposal would gradually reduce pledge rewards to zero when the proportion of pledged ETH exceeds 50% of total supply.

Proponents believe the measure will reduce ETH supply inflation and strengthen cybersecurity mechanisms. Opponents counter that implementing the proposal could undermine decentralized financial agreements and weaken Ethereum's value as a revenue asset in institutional portfolios.

The total amount of pledged Ethereum has continued to grow since January, reaching 41.81 million ETH units this week. In addition, there are currently 2.33 million ETH waiting to be activated in the verifier queue.

Ethereum exchange-traded funds recorded a net outflow of US$16.3 million over the past two trading days, compared with a significant inflow of US$244.9 million the previous week. The combined net assets of all Ethereum ETF products currently stand at $10.48 billion.

Market analyst Michaël van de Poppe said on the X platform that ETH seems ready to break through upwards. He pointed out that narrow trading ranges and rising lows suggested that a major price move could be on the horizon, with an initial target of $2300.

Large companies are actively attracting funds at support levels

Ethereum treasury company Bitmine (led by senior analyst Tom Lee) purchased 7391 ETH units for approximately US$14 million when the price fell back to US$1850 on Tuesday. Lee observed that market expectations for the Federal Reserve to raise interest rates in September have dropped from 70% to 46%. He believes that loose monetary conditions may bring positive momentum to the cryptocurrency market.

From a technical perspective, Ethereum continues to trade above the 20-day moving average ($1884) and 50-day moving average ($1864). The 100-day index moving average is at $1922, constituting the main resistance level.

A bullish flag-shaped continuation pattern has been formed on the price chart since mid-July. If it breaks through US$1950 decisively, it may push ETH to US$2150, and further upside potential may reach US$2500.

Liquidation data shows that the amount of forced liquidation in the past 24 hours was US$32.3 million, of which US$23.4 million was liquidation of short positions.