REX-Osprey has introduced a groundbreaking exchange-traded fund (ETF) that uniquely combines spot Ethereum exposure with staking rewards, setting a new standard in the investment landscape. Announced on September 25, the ETF, which trades under the ticker ESK, is registered as a 1940 Act ETF, providing investors with access to Ethereum through a framework they are already familiar with.
The ESK fund is designed to blend holdings of spot Ethereum (ETH) with a staking component. Investors will benefit from monthly distributions of rewards generated through Ethereum’s proof-of-stake mechanism. A significant feature of the ESK ETF is that it passes on the full staking rewards to shareholders, distinguishing itself from many traditional staking products that typically retain a portion of the returns.
Greg King, the chief executive of REX Financial, highlighted the innovative nature of ESK, stating that it offers a broad-based ETF solution that allows investors to not only gain exposure to Ethereum but also enjoy staking rewards. King emphasized that this launch is part of their ongoing commitment to incorporate crypto staking within the ETF structure.
This move follows REX-Osprey’s launch earlier this year of the first domestic Solana Staking ETF in the United States, which marked a significant milestone by being the first Solana ETF and the initial domestic crypto ETF to feature staking-related distributions. Since its debut, the Solana ETF has seen substantial growth, surpassing $300 million in assets under management and transitioning to a Regulated Investment Company (RIC) structure to enhance tax efficiency while maintaining its dual strategy of spot-and-staking investments.
However, the launch of ESK arrives at a time when interest in spot Ethereum ETFs appears to be waning. Recent data from SoSo Value indicates that September has only seen $110 million in net inflows across nine US Ethereum spot products. This is a stark contrast to the $3.8 billion and $5 billion inflows recorded in August and July, respectively. With inflows occurring over just seven trading days and outflows on ten others throughout September, the current appetite appears subdued. Despite this, total cumulative flows into the Ethereum ETFs have reached $13.62 billion, with these funds collectively managing $27.42 billion.
If the US Securities and Exchange Commission (SEC) provides the green light for the integration of staking into these products, it could significantly bolster these figures. The SEC has recently extended its review period regarding this potential approval, leaving investors eager for the outcome.
