VanEck to Close Ethereum Futures Exchange-Traded Fund
Asset manager VanEck has decided to close its futures-based Ether exchange-traded fund (ETF) due to insufficient demand, as spot cryptocurrency ETFs continue to attract more investments, as announced on September 6.
VanEck cited various factors, including performance, liquidity, assets under management (AUM), and investor interest, as reasons for shutting down the VanEck Ethereum Strategy ETF (EFUT). Trading of EFUT shares will cease on September 16, with the liquidation of fund assets and their return to investors expected around September 23.
Nate Geraci, president of The ETF Store, expressed that the closure of EFUT was not unexpected. He had previously forecasted that spot crypto ETFs would make futures-based crypto ETFs obsolete, a prediction that seems to be coming true. Geraci also speculated that VanEck may have viewed EFUT primarily as a marketing expense.
Launched in 2023, EFUT has only accumulated around $21 million in AUM as of September 6, according to data from VanEck’s website. In contrast, VanEck’s spot ETH ETF, ETHV, introduced in June, boasts over $55 million in AUM.
The Securities and Exchange Commission (SEC) greenlit spot Ethereum ETFs for trading in the US in July. Currently, spot ETH ETFs collectively manage about $6.5 billion in AUM, significantly overshadowing the less than $170 million held in futures-based ETH ETFs, as reported by fund researcher Morningstar.
In July, fund issuers launched a total of nine spot Ethereum ETFs, with the largest one, Grayscale Ethereum Trust (ETHE), overseeing nearly $4.2 billion in AUM, according to Morningstar’s data.
Unlike spot ETFs that hold the actual assets, futures-based ETFs utilize standardized contracts to mimic the performance of cryptocurrencies like Ether and Bitcoin. However, futures-based ETFs typically underperform spot cryptocurrency funds due to the monthly expiration of futures contracts, which necessitates rolling them over into new contracts incurring additional costs.
Cryptocurrency ETFs have been a significant player in the ETF market, with 13 out of the 25 largest ETF launches in 2024 by year-to-date inflows being related to cryptocurrencies.
