REX-Osprey debuted the REX-Osprey ETH + Staking ETF (BATS: ESK) on Thursday, the first 1940 Act ETF available for listing in the U.S. that combines direct exposure to Ethereum (ETH) and staking rewards. The fund enables investors to access Ethereum’s proof-of-stake network and receive monthly distributions, with 100% of staking rewards allocated directly to shareholders.
ESK has a combination of directly staked Ethereum and exchange-traded products that stake ETH themselves, offering an expense-effective, regulated vehicle for crypto exposure. REX and Osprey both explained that neither company keeps any share of staking rewards.
Greg King, CEO of REX Financial, explained that with ESK, investors gain access to Ethereum, plus staking rewards, in the most broadly based U.S. ETF format.
The IPO arrives during a time of heightened Ethereum volatility. Over the past week, the broader crypto world has been seeing weakness. In fact, ETH fell below $4,000 initially on Thursday for the first time since August 7, dropping over 4% in 24 hours and approximately 19% from its all-time high of $4,946, reached nearly one month ago. Ethereum-based ETFs are also not immune, suffering $76.9 million in outflows on Wednesday, SoSoValue data shows.
Sologenic CEO Michael McCluskey stated that the recent volatility is “not a reflection of the fundamentals” of Ethereum, but instead is driven by new economic forces, specifically the arrival of large-scale institutional investors. Despite the wild swings, crypto proponents are moving forward with innovative products, such as ESK, aiming to provide investors with regulated access to both price action and staking returns.
The launch follows the July introduction of SSK, the REX-Osprey Solana + Staking ETF, which was the first U.S. cryptocurrency ETF to pay out staking rewards. SSK has since grown to over $300 million in assets and recently became a Regulated Investment Company (RIC), making it more tax-efficient while still employing its spot-plus-staking approach.
While ESK offers a regulated route to Ethereum exposure, REX-Osprey warns that investing in the fund is not equivalent to owning Ethereum and comes with substantial risk, including the possible loss of capital.
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