As an analyst with over two decades of experience in the financial markets, I have seen my fair share of ETFs come and go. The news that VanEck is closing its Ethereum Strategy ETF (EFUT) doesn’t come as a complete surprise to me, given the company’s previous move to liquidate its Bitcoin Strategy ETF earlier this year.
VanEck announced today its decision to close and liquidate its Ethereum Strategy ETF, which is listed on the CBOE.
According to a statement from VanEck, the ETF fund related to Ethereum (ticker symbol ‘EFUT’) will no longer be traded after the market closes on September 16. The fund is anticipated to be officially closed and liquidated around September 23.
On the day of liquidation, those shareholders who continue to own EFUT shares will be given a monetary payment proportional to the net worth of their holdings.
The choice was made after VanEck thoroughly assessed various aspects like performance, liquidity, number of assets being managed, and investor demand (alongside other operational factors). As mentioned in the announcement, these elements, along with other operational considerations, ultimately resulted in the fund’s termination.
VanEck’s recent ETH moves
VanEck’s action follows the green light for a traditional Ethereum exchange-traded product, possibly impacting their choice to halt the futures-backed ETF.
An ETP directly exposes an asset by holding it or its equivalent, like spot Bitcoin (BTC) or Ethereum. A futures ETF tracks the price of futures contracts, offering indirect exposure to an asset’s future price movements.
In case of the fund’s closure, investors might be given a last distribution that includes any leftover profits or capital gains. For tax purposes, the company will issue an annual report at year-end outlining any capital gains or losses resulting from the liquidation process, as stated in the press release.
In January, it was announced that VanEck would be terminating their Bitcoin Investment Strategy ETF. This decision was based on factors like performance, market liquidity, and insufficient investor interest. The ETF, which focused mainly on investing in Bitcoin futures contracts, was scheduled for delisting from the 30th of January.
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2024-09-06 19:26