VanEck Done With Ethereum Strategy ETF, Blames 'Operational Considerations'

Global investment management firm VanEck has decided to close and liquidate its Ethereum ETH/USD futures ETF (EFUT).

What Happened: The board of trustees of VanEck ETF Trust has given the green light to dissolve the VanEck Ethereum Strategy ETF (EFUT) on the CBOE exchange.

The decision was reached after a comprehensive evaluation of various factors such as performance, liquidity, assets under management, investor interest, and other operational considerations.

• Shareholders have the option to sell their shares on the Fund's listing exchange until the market closes on September 16, 2024. Post this date, the Fund's shares will be de-listed and will no longer trade on the listing exchange.
• Those who retain their shares of the Fund on the liquidation date, expected to be around September 23, 2024, will receive a liquidating distribution of cash in their brokerage accounts, equivalent to the net asset value of their shares.
• The liquidation proceeds are planned to be disbursed to shareholders around September 23, 2024.

For tax purposes, shareholders will generally recognize a capital gain or loss equal to the amount received for their shares over their adjusted basis in such shares.

The shareholders will also receive a final distribution of net income, and capital gains earned by the Fund and not previously distributed before liquidation.

Also Read: Crypto Trader Dismisses Possibility Of Bitcoin’s Potential Crash, Meme Coins Not The Backbone Of ‘All-Around Crypto Cycle’

Why It Matters: The closure and liquidation of the Ethereum futures ETF by VanEck is a significant event in the investment landscape.

This decision could potentially impact the dynamics of the cryptocurrency market and the ETF industry. It also brings to light the factors that investment management firms consider when deciding to liquidate such funds.

Based on SoSoValue data, the U.S. Ethereum Spot ETF as of Sept. 5 witnessed a drop of $152,000 daily total net flow and a plunge of $562.3 million in cumulative total net inflow. The total value traded stood at $108.6 million.

What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.

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