VanEck to liquidate Ethereum futures ETF as its crypto strategy shifts

VanEck has announced plans to close and liquidate its Ethereum Strategy ETF (EFUT), signaling a shift in the asset manager’s approach to crypto-related investment products.

The decision to shutter EFUT comes as VanEck continues to evaluate its ETF offerings based on factors including performance, liquidity, assets under management, and investor interest. The fund’s Board of Trustees approved the liquidation on September 5, 2024.

Shareholders of EFUT have until market close on September 16, 2024 to sell their shares on the fund’s listing exchange. After this date, the ETF will cease trading and be delisted. Those still holding shares on the liquidation date, expected to be September 23, 2024, will receive a cash distribution equal to the net asset value of their holdings.

Ongoing assessment

VanEck emphasized that this move is part of its ongoing assessment of its product lineup rather than an exit from the cryptocurrency space. The firm has a history of identifying emerging investment trends, including being an early mover in offering gold investments in 1968 and emerging markets exposure in 1993.

“As the sponsor of VanEck ETFs, VanEck continuously monitors and evaluates its ETF offerings across a number of factors,” the company stated in its announcement.

As such, the decision appears to be a strategic realignment rather than a retreat from digital asset-related products. VanEck adds that the decision was based on “an analysis of these factors and other operational considerations,” although the specific tangents for these were not discussed in detail. For context, VanEck is also one of the asset managers who have predicted Ethereum’s price surges, with a broader forecast at $154K by 2030.

Ethereum’s long-term viability

The closure of EFUT shows the challenges and changes, in particular with crypto-based investment vehicles. While Ethereum futures offered a regulated way to gain exposure to the second-largest cryptocurrency by market cap, the product may not have garnered sufficient investor interest or assets to remain viable in VanEck’s lineup.

Notably, VanEck continues to offer other crypto-related products, including its Digital Assets Mining ETF (DAM) and its Bitcoin Strategy ETF (XBTF). The firm also has a pending application for a spot Solana ETF, demonstrating its ongoing engagement with digital asset investment opportunities. Asset managers like VanEck are likely to continue refining their product offerings to best serve investor demand while navigating the unique risks and opportunities presented by digital assets.

This story is developing and will be updated as more details surface. Crypto Briefing has reached out for comment from VanEck.