Ethereum Futures ETF by VanEck Ceases Operations Amid Challenging Market Environment
Asset management firm and ETF issuer VanEck recently made public its decision to liquidate its Ethereum Futures ETF (EFUT). Shareholders have until September 16, 2024, to sell their shares on the fund’s listing exchange before they are delisted from trading. It is important for investors to be aware that selling shares before the specified date may result in transaction fees imposed by their broker-dealers.
Upon the liquidation date, expected around September 23, 2024, shareholders who retain their shares will receive a cash distribution equivalent to the net asset value of their holdings. This distribution will be credited to the cash segment of their brokerage accounts. Additionally, shareholders might also receive a final distribution of net income and capital gains accrued by the Fund, potentially offering an additional financial benefit as they conclude their investment in the ETF.
The final tax status of all distributions, including the liquidating distribution, will be communicated to shareholders through year-end tax reporting by VanEck. This report will clarify any parts of the distribution that could be treated as a return of capital, impacting the shareholder’s basis in their shares.
Earlier this year, VanEck closed its Bitcoin futures ETF following the approval of its Bitcoin spot ETF in January. Notably, there was no mention of its spot Ethereum ETF (ETHV) in the recent announcement, despite being part of the asset manager’s offerings and experiencing significant outflows since its launch in July.
Both the Ethereum and Bitcoin spot ETF markets have witnessed notable outflows in the past month, further influencing the ongoing price corrections in the two leading cryptocurrencies. VanEck led the Ethereum ETF market outflows, totaling around $47 million, contributing to a nearly 7% decline in ETH’s price, currently trading at $2,240. Over fourteen days, ETH has dropped nearly 20%, accounting for 5.6% of the market’s second-largest cryptocurrency.
The spot Ethereum ETF market has seen outflows of approximately $562 million since its inception on August 19, with VanEck’s outflows amounting to $47 million over the same period, as per Farside data. This trend has played a role in the recent price correction, with Ethereum experiencing a 7% drop and trading at $2,240. Over the past month, ETH has decreased by nearly 20%, constituting 5.6% of the total cryptocurrency market.
VanEck’s decision to liquidate its Ethereum Futures ETF and the subsequent impact on investors highlight the evolving landscape of cryptocurrency investments and the importance of staying informed about market developments.
