VanEck to Close Ethereum Futures ETF Due to Challenges in Spot Funds

Investment management company VanEck has revealed its decision to shut down and liquidate its Ethereum futures ETF (EFUT), a move that comes amid a notable exodus from spot Ethereum ETFs shortly after their introduction in the United States.

This development highlights the broader difficulties confronting the Ethereum ETF sector, which has witnessed a total net outflow of $562.3 million, as reported by data from SoSo Value. Since September 15, there has been only one day of positive flows, with another day showing no flows and the rest indicating outflows.

VanEck’s Ethereum Strategy ETF, traded under the symbol ETHV on the CBOE, will halt trading on September 16, as per the company’s announcement.

Shareholders who retain their shares until the liquidation date, expected around September 23, will receive a cash distribution equivalent to the net asset value of their holdings.

According to SoSoValue data as of September 5, the collective net assets of Ethereum-based ETFs in the U.S. market were valued at $6.49 billion, representing 2.28% of Ethereum’s market capitalization.

VanEck’s ETHV fund, ranked sixth among Ethereum ETFs, holds $55.56 million in net assets, constituting 0.02% of the total Ethereum market share. The fund has experienced a daily change of -2.93%, reflecting the performance of other Ethereum ETFs with negative daily changes ranging from -2.48% to -3.10%.

The company cited factors such as performance, liquidity, assets under management, and investor interest as pivotal in the decision to close the fund, marking a significant shift in VanEck’s cryptocurrency-related offerings.

Other Ethereum ETFs in the market are also encountering challenges. The leading performer, Grayscale’s ETHE, possesses $4.17 billion in net assets, commanding 1.46% of the Ethereum market share. However, it has witnessed substantial outflows following its transition from a closed-end fund to a spot ETF, as investors withdraw their funds, potentially exploring alternative investment options.

As the liquidation process unfolds, VanEck has advised shareholders to sell their ETHV shares on the CBOE until market close on September 16. The fund will cease accepting creation orders from authorized participants on the same date.