Introduction of the REX-Osprey ETH + Staking ETF
In a groundbreaking move for the cryptocurrency and investment sectors, REX Shares and Osprey Funds have jointly launched a new exchange-traded fund (ETF) named the REX-Osprey ETH + Staking ETF, also known as ESK. This fund is notable for being the first of its kind in the United States, as it innovatively combines Ethereum (ETH) holdings with staking rewards. Announced in a press release on September 25, 2023, this initiative aims to integrate blockchain-based yields into conventional investment strategies, appealing to a broader audience of investors.
Key Features of the ESK ETF
The ESK ETF is built to provide investors with direct exposure to Ethereum, alongside the monthly returns generated through staking these assets directly on the blockchain. This dual approach allows investors to potentially benefit from both the price appreciation of Ethereum and the additional rewards yielded from staking operations.
A key feature of the ESK fund is its compliance with the Investment Company Act of 1940, a regulatory framework that imposes rigorous standards on the management and operations of investment vehicles. Additionally, the fund’s structure is unique as it combines staked Ethereum with other ETFs that also participate in staked ETH positions. Importantly, every validator reward accrued by the fund will be passed entirely to the investors, without REX Shares or Osprey Funds claiming any portion of the earnings. This characteristic distinguishes ESK from other cryptocurrency-linked products that typically impose performance fees or engage in revenue-sharing arrangements.
Statements from Leadership
Greg King, CEO of REX Financial, emphasized the significance of the ESK launch, stating that it is a natural progression in their ongoing efforts to provide investors with access to both Ethereum and staking rewards under a comprehensive ETF framework. He remarked, “With ESK, we’re giving investors access to Ethereum plus staking rewards in the most broad-based US ETF format. This continues our work of introducing crypto staking through the ETF structure.”
Market Context and Future Prospects
The introduction of the ESK ETF follows the successful July launch of the REX-Osprey Solana + Staking ETF (SSK), which has already amassed over $300 million in assets under management, reflecting a strong demand for this innovative investment approach. Furthermore, SSK’s recent transition to a regulated investment company structure promises enhanced tax efficiency, a benefit that could also be relevant for the ESK ETF as it evolves and matures in the market.
