The financial innovation wave continues to surge through the investment landscape, with REX Financial (REX) introducing the REX Crypto Equity Premium Income ETF (Nasdaq: CEPI)—a new exchange-traded fund designed to offer investors targeted exposure to leading U.S.-listed crypto-related companies while generating enhanced monthly income through a sophisticated covered call strategy.
This launch marks a pivotal step in bridging traditional investment vehicles with the fast-evolving digital asset ecosystem, offering a structured way for income-focused investors to participate in the growth of the cryptocurrency sector without directly holding volatile digital tokens.
How CEPI Delivers Income and Exposure
CEPI is built around the BITA Crypto Assets & Digital Payments Index, a rules-based benchmark tracking the performance of the top 25 U.S. public companies actively involved in crypto mining, blockchain development, digital payments infrastructure, custody solutions, and crypto trading platforms. By focusing on equities rather than direct crypto holdings, CEPI provides regulated, exchange-listed access to the sector’s most influential players.
What sets CEPI apart is its out-of-the-money covered call strategy. The fund systematically sells call options on the underlying stocks in the index—options with strike prices above current market levels. This approach generates premium income, which contributes to the fund’s monthly distributions, while still allowing for potential upside if stock prices rise moderately.
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While the strategy caps extreme upside during strong rallies, it enhances yield and can help smooth volatility—making it particularly appealing in uncertain or sideways markets.
Proven Strategy with a Growing Track Record
CEPI is REX’s third covered call ETF, joining two successful predecessors: the FANG & Innovation Equity Premium Income ETF (FEPI) and the REX AI Equity Premium Income ETF (AIPI). Both funds have demonstrated strong demand since launch, collectively amassing over $500 million in assets under management as of late 2024.
- FEPI delivers an annualized distribution rate of 25.2% (as of November 25, 2024)
- AIPI offers an even higher rate of 34.8% over the same period
While their 30-day SEC yields are currently negative due to the nature of option income not being fully captured in that metric, these figures reflect REX’s ability to consistently generate income through disciplined options writing.
“Crypto is transforming financial ecosystems and creating unique investment opportunities,” said Greg King, CEO of REX Financial. “With CEPI, we’re applying our targeted covered call strategy to the sector’s most disruptive companies, creating new opportunities for income generation.”
Core Keywords and Market Positioning
The strategic design of CEPI aligns with several high-demand investor themes in 2025:
- Crypto ETF
- Covered call strategy
- Monthly income ETF
- BITA Index
- Crypto equity exposure
- Out-of-the-money options
- Passive income investing
- Digital payments stocks
These keywords reflect both search trends and investor intent—particularly among retail and intermediate investors seeking yield in a low-interest-rate environment while maintaining exposure to high-growth sectors.
CEPI’s structure allows investors to benefit from macro-level adoption of blockchain and digital payments without having to navigate the complexities and security risks of owning cryptocurrency directly.
Understanding the Risks and Trade-offs
As with any investment, CEPI comes with important considerations:
Industry Concentration Risk
Because the underlying index focuses on crypto-related businesses, the fund may be heavily weighted toward technology and financial innovation firms. This concentration can amplify sector-specific volatility.
Derivatives and Liquidity Risk
The use of options introduces derivatives risk, including imperfect correlation, counterparty exposure, and valuation challenges—especially during market stress. Some options may also be less liquid, affecting execution and pricing.
Distribution Risk
While CEPI targets monthly income, distributions are not guaranteed. Moreover, current payouts may consist entirely of return of capital, which reduces the fund’s net asset value over time. Investors should not assume distributions equate to profit.
Call Writing Strategy Limitations
By selling upside call options, CEPI limits its participation in extreme stock price surges. This trade-off prioritizes income over maximum capital appreciation.
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The Role of the BITA Crypto Assets & Digital Payments Index
The foundation of CEPI’s strategy lies in its benchmark—the BITA Crypto Assets & Digital Payments Index. This index is:
- Comprised of 25 U.S.-listed equities
- Weighted by modified free-float market cap
- Rebalanced monthly and reconstituted quarterly
- Focused on companies deriving significant revenue from crypto-related operations
This dynamic approach ensures the fund stays aligned with shifting market leadership—from miners and exchanges to blockchain developers and fintech innovators.
Frequently Asked Questions (FAQ)
Q: What types of companies are included in CEPI?
A: CEPI holds U.S.-listed firms engaged in cryptocurrency mining, trading platforms, blockchain technology, digital payment systems, and crypto custody services—such as Coinbase, Marathon Digital, and Square.
Q: How does CEPI generate monthly income?
A: By selling out-of-the-money call options on its holdings, CEPI collects premiums that contribute to its monthly distributions. This strategy aims to enhance yield without requiring direct crypto ownership.
Q: Is CEPI a cryptocurrency fund?
A: No. CEPI invests in stocks of companies involved in the crypto ecosystem—not in Bitcoin or other digital tokens. This offers regulated exposure without custody or volatility risks tied to direct crypto holdings.
Q: Can I lose money investing in CEPI?
A: Yes. Like all ETFs, CEPI’s share price fluctuates. The return of capital in distributions may reduce NAV over time, and poor performance in the tech or crypto sectors could lead to losses.
Q: How does CEPI differ from a Bitcoin spot ETF?
A: A Bitcoin spot ETF holds actual BTC. CEPI holds equities of companies benefiting from crypto adoption. It uses an active income strategy (covered calls), whereas most spot ETFs are passive.
Q: Are distributions from CEPI taxable?
A: Yes. Distributions may be classified as ordinary income, capital gains, or return of capital for tax purposes. Investors should consult a tax advisor and review official 19a-1 notices.
A Strategic Addition to Modern Portfolios
For investors seeking yield amid rising interest in blockchain innovation, CEPI represents a compelling hybrid: part growth exposure, part income engine. It reflects a broader trend—financial engineers adapting time-tested equity strategies like covered calls to emerging sectors once considered too speculative for mainstream portfolios.
With over $9 billion in assets under management, REX has established itself as a pioneer in alternative ETF structures—from leveraged sector tools to option-income funds. CEPI continues that legacy by offering a disciplined, rules-based path into one of today’s most dynamic markets.
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As regulatory clarity improves and institutional adoption grows, products like CEPI may become essential tools for investors looking to earn income from structural shifts—not just speculate on price swings.