VanEck to Shut Down Ethereum Futures ETF by End of September

VanEck has made public its intention to shut down and liquidate its Ethereum Strategy ETF, which is currently listed on the CBOE exchange. The Ethereum ETF fund, known by the ticker symbol ‘EFUT’, is scheduled to halt trading after the market closes on September 16, as per a VanEck press release, with the liquidation process anticipated to occur around September 23.

Upon the liquidation date, shareholders holding EFUT shares will receive a cash distribution based on the net asset value of their respective holdings. The decision to close the fund stems from VanEck’s routine assessment of various factors including performance, liquidity, assets under management, and investor interest, among other considerations as outlined in the release.

VanEck’s recent actions in the Ethereum space follow the approval of a spot Ethereum exchange-traded product, which could have influenced the discontinuation of the futures-based ETF. An ETP directly exposes an asset by holding it or its equivalent, as seen with spot Bitcoin or Ethereum. In contrast, a futures ETF tracks the price of futures contracts, providing indirect exposure to the future price movements of an asset.

Before the fund’s dissolution, investors may also receive a final distribution of any remaining net income or capital gains. For tax purposes, VanEck will furnish a year-end report detailing any capital gains or losses associated with the liquidation process, according to the press release.

In a similar move earlier this year, VanEck announced the liquidation of its Bitcoin Strategy ETF in January, citing reasons such as performance, liquidity, and low investor interest. The ETF, which predominantly invested in Bitcoin futures, was slated for delisting post January 30.

In conclusion, VanEck’s decision to close and liquidate its Ethereum Strategy ETF aligns with its strategic evaluation of market conditions and investor dynamics, reflecting the company’s commitment to adapting to the evolving landscape of digital asset investments.