VanEck Shuts Down Ethereum Futures ETF Amidst Struggling Market Conditions

On Friday, asset management firm and exchange-traded fund (ETF) issuer VanEck announced its decision to liquidate its Ethereum Futures ETF (EFUT). According to the official release, shareholders will have the opportunity to sell their shares on the fund’s listing exchange until market close on September 16, 2024. 

After that date, the shares will no longer be traded on the exchange and will be officially delisted. Investors are advised that if they sell their shares prior to this date, they may incur transaction fees from their broker-dealers.

According to the notice, those who continue to hold shares on the liquidation date, which is expected to be approximately September 23, 2024, will receive a cash distribution equal to the net asset value of their shares.

This means that shareholders will receive a cash amount based on the value of their holdings at the time of liquidation, which will be credited to the cash portion of their brokerage accounts.

Additionally, shareholders may receive a final distribution of net income and capital gains earned by the Fund that have not been previously distributed prior to the liquidation. This could provide investors with an extra financial benefit as they wind down their investment in the ETF.

VanEck also noted that the final tax status of all distributions made by the Fund, including the liquidating distribution, will be communicated to shareholders through the year-end tax reporting. This report will clarify any portions of the distribution that may be treated as a return of capital, which could affect the shareholder’s basis in their shares.

Earlier this year, the asset manager also closed its Bitcoin futures ETF due to the approval of its Bitcoin spot ETF in January this year. 

However, the announcement made no mention of its recently launched spot Ethereum ETF (ETHV), which is still on the asset manager’s list of offerings despite experiencing significant outflows after it began trading in July. 

Both the Ethereum and Bitcoin spot ETF markets have seen significant outflows over the past month, further impacting the ongoing price correction seen in the prices of the two largest cryptocurrencies on the market.

The Ethereum ETF market has seen outflows totaling approximately $562 million since its inception on August 19, led by VanEck’s outflows of $47 million over the same period, according to Farside data. 

This has contributed to a nearly 7% drop in ETH’s price, which is currently trading at $2,240. Over the fourteen-day period, ETH is also down nearly 20%. And over the past month, accounts for 5.6% for the second largest cryptocurrency on the market.

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