VanEck announced that it will shut down its Ethereum futures ETF, the EFUT just two months after launching its spot Ethereum ETF.
Ethereum ETF market isn’t for the touchy-feely
Spot Ethereum funds face huge outflows shortly after they began trading in the United States.
The Ethereum ETF market, all funds combined has seen a total net outflow of $562.3 million.
Since August 15, there has only been one day of positive inflows, while other days have shown either no flows or outflows.
The VanEck Ethereum Strategy ETF, identified by the ticker ETHV on the CBOE, will stop trading on September 16.
Shareholders who keep their shares until the liquidation date, expected around September 23, will receive a cash distribution based on the net asset value of their holdings.
The total net assets of Ethereum-based ETFs in the U.S. market were reported to be $6.49 billion, which is about 2.28% of Ethereum’s total market cap.
VanEck’s ETHV fund ranks sixth among Ethereum ETFs, holding $55.56 million in net assets, which represents only 0.02% of the overall Ethereum share.
The fund experienced a daily change of -2.93%, pretty similar to other Ethereum ETFs that have seen declines ranging from -2.48% to -3.10%.
The future of Ethereum ETFs
VanEck cited several reasons for closing the fund, including performance issues, liquidity concerns, assets under management, and maybe the most important, the lack of investor interest. And VanEck isn’t the only one.
Other Ethereum ETFs are also facing difficulties. Grayscale’s ETHE, the top performer, holds $4.17 billion in net assets, making up 1.46% of the Ethereum share.
Yet, it has also seen large outflows after transitioning from a closed-end fund to a spot ETF, as investors withdraw their funds and may choose to invest in competing options.
Turning off the lights
As the liquidation process begins, VanEck advised shareholders to sell their ETHV shares on the CBOE before the market closes on September 16.
The fund will also stop accepting creation orders from authorized participants on that same date.
Now many experts think that the ongoing struggles of Ethereum ETFs may lead to further changes in how these funds operate and attract investors in the future, because the initial hype around the asset class is clearly not enough for the long term success.
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