Ethereum

Asset manager VanEck is shuttering its futures-based Ether (<a data-ct-non-breakable="null" href="https://cointelegraph.com/ethereum-price" rel="null" target="null" text="null" title="null">ETH</a>) exchange-traded fund (ETF), citing insufficient demand as spot cryptocurrency ETFs dominate inflows, according to a Sept. 6 announcement.
VanEck chose to close the fund due to factors “including performance, liquidity, assets under management, and investor interest,” it <a data-ct-non-breakable="null" href="https://www.businesswire.com/news/home/20240906738586/en/VanEck-Announces-Change-to-ETF-Product-Line" rel="nofollow noopener" target="_blank" text="null" title="https://www.businesswire.com/news/home/20240906738586/en/VanEck-Announces-Change-to-ETF-Product-Line">said</a>.&nbsp;
Shares of the VanEck Ethereum Strategy ETF (EFUT) will stop trading on Sept. 16 and fund assets will be liquidated and returned to investors on or around Sept. 23, according to the announcement.
The decision comes as “no surprise,” <a data-ct-non-breakable="null" href="https://x.com/NateGeraci/status/1832099162856284161" rel="nofollow noopener" target="_blank" text="null" title="https://x.com/NateGeraci/status/1832099162856284161">said</a> Nate Geraci, president of The ETF Store — an investment adviser — in a post on the X platform. In 2023, Geraci <a data-ct-non-breakable="null" href="https://x.com/NateGeraci/status/1687229563212824576" rel="null" target="null" text="null" title="null">predicted</a> that spot crypto ETFs “would basically render all of these futures-based crypto ETFs obsolete.”
“Guessing VanEck viewed EFUT primarily as a marketing expense,” Geraci added.
<figure>
 <img alt="VanEck to shutter Ethereum futures ETF" name="" src="https://s3.cointelegraph.com/uploads/2024-09/0191c8fd-3dea-734b-b367-5b3208ea5573">
 <figcaption style="text-align: center;">
 Top ETF launches in 2024. Source: The ETF Store
 </figcaption>
</figure>
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/ethereum-etfs-coming-what-you-need-know" rel="null" target="null" text="null" title="null">Ethereum ETFs are coming — Here’s what you need to know</a>
Launched in 2023, EFUT only has approximately $21 million in assets under management (AUM) as of Sept. 6, according to VanEck’s website. The VanEck Ethereum ETF (ETHV) — the spot ETH ETF VanEck launched in June — has more than $55 million in AUM.&nbsp;
The Securities and Exchange Commission authorized spot Ether ETFs to start trading in the United States in July. Spot ETH ETFs now collectively command approximately $6.5 billion in AUM, compared to less than $170 million across futures-based ETH ETFs, according to data from fund researcher Morningstar.&nbsp;
Fund issuers launched nine spot Ether ETFs in July. The largest — the Grayscale Ethereum Trust (ETHE) — manages nearly $4.2 billion, according to Morningstar.&nbsp;
Futures are standardized contracts to buy or sell an underlying asset at a future date. Some ETFs use futures to synthetically replicate the performance of spot cryptocurrencies, such as Ether or Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/bitcoin-price" rel="" target="_self" text="null" title="https://cointelegraph.com/bitcoin-price">BTC</a>).&nbsp;
Futures-based ETFs generally underperform spot cryptocurrency funds because futures typically expire monthly and must be rolled over into new contracts, incurring added costs.
Cryptocurrency ETFs accounted for <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/crypto-dominates-biggest-2024-etf-launches" rel="null" target="null" text="null" title="null">13 of the 25 largest ETF launches in 2024</a> by year-to-date inflows.&nbsp;
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/ai-more-power-hungry-bitcoin-profits-pose-risks-bitcoin-miners/" rel="null" target="null" text="null" title="null">AI may already use more power than Bitcoin — and it threatens Bitcoin mining</a>

VanEck to shutter Ethereum futures ETF

Cointelegraph

Other articles published on Sep 6, 2024

FTX Bankruptcy Plan Faces Scrutiny as SEC Questions Stablecoin Payments

QuickSwap Price Prediction: QUICK Soars 18% On Binance Perpetual Contract Launch, But Experts Say...

VanEck to Liquidate Ethereum Futures ETF by September 16

Blockstream Launches BMN2 Mining Note with 50% Discount on Hash Price

Emerging $0.0003 Solana Memecoin Set to Surpass Popcat (POPCAT) and Bonk (BONK) in Market Cap

Understanding the Implications of THIS Group’s Growing Bitcoin Investment

Join our free newsletter for daily crypto updates!