Last updated on August 31st, 2025 at 12:17 pm
NEOS Investments has filed a new prospectus with the U.S. Securities and Exchange Commission (SEC) to launch a “High Income” Ethereum exchange-traded fund (ETF) that aims to boost yields by using indirect exposure and options trading strategies.
Unlike traditional Ethereum funds that directly hold the cryptocurrency, this fund plans to gain exposure primarily through spot Ethereum ETFs, while employing a “synthetic covered call strategy.”
New filing for an ethereum high income ETF. Now that the category is seeing big boy flows it will get the full ETF treatment. So many activities pic.twitter.com/DL3En9D1eo
— Eric Balchunas (@EricBalchunas) August 11, 2025
The timing of NEOS’s filing reflects Ethereum’s recent strong performance, which has even outpaced Bitcoin ETFs in recent weeks. This surge has encouraged innovation in the crypto ETF market as institutional interest in Ethereum grows. Bloomberg ETF analyst Eric Balchunas noted that the heightened inflows and market confidence provide NEOS the opportunity to introduce more aggressive, income-focused products tailored to varied risk appetites within the evolving Ethereum ETF landscape.
This high-income fund strategy is not entirely new for NEOS, which has previously deployed similar options-based strategies with Bitcoin ETFs to deliver higher yields. The layered use of options can enhance returns but also introduces complexity and volatility beyond the underlying price moves of Ethereum itself. NEOS’s move signals a maturing market where asset managers are exploring diversified, income-driven products as institutional investors seek alternatives to plain spot exposure.
The prospectus is a step in the regulatory approval process and does not guarantee the fund’s launch, reflecting ongoing scrutiny by the SEC on crypto ETFs. If approved, this product could expand Ethereum investment options for investors looking for regulated, potentially higher-yield vehicles that combine spot exposure with strategic options overlays. This development also highlights broader trends of increasing institutional adoption and innovation in Ethereum financial products.
In another development, Evolve Funds’ initiative recently introduced 1.25x leveraged Bitcoin and Ethereum ETFs in Canada. This move aims to revitalise Canada’s crypto ETF market, which has been losing ground to the US due to lower fees and more appealing offerings south of the border.
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