VanEck ends Ethereum ETF, revises approach to crypto investments
The asset management company VanEck declared on Friday that it will be closing its Ethereum Strategy ETF (EFUT), which is based on futures. According to VanEck, the fund’s trading will end on September 16. On or around September 23, the assets will thereafter be liquidated and given back to investors.
One of the reasons VanEck shut down the ETF was due to low investor demand; investors preferred the company’s spot Ethereum ETF, VanEck Ethereum ETF (ETHV), which debuted in July.
ETFs are Observed to Surpass Conventional Futures-Based Funds
VanEck’s action fits with a broader trend in the cryptocurrency exchange-traded fund industry, where investors are showing a greater interest in the recently introduced spot ETFs than in the more established futures-based funds.
Van Eck’s EFUT now only manages assets worth US$21 million. On the contrary, the spot-based ETHV of the company has an AUM of about US$55 million. Compared to ETHV, EFUT has been trading for more than a year.
Nate Geraci, President of the investment advising business The ETF Store, correctly forecasted on X / Twitter back in August 2023 that if authorized, the crypto spot ETFs will make the previous ETFs obsolete, indicating the slow demise of futures-based crypto ETFs:
One must expect that the spot ETH ETF would be permitted as well if Grayscale wins the lawsuit and the SEC permits both ETH futures ETFs and spot BTC ETFs. Of course, there are many “ifs,” but in that case, all of these futures-based crypto ETFs are obsolete by the ETF Store’s president, Nate Geraci
Geraci stated that it was “no surprise” when asked about VanEck’s reported closure of EFUT over the weekend. Nine spot Ethereum ETFs were approved by the US Securities and Exchange Commission (SEC) to begin trading in July. As of right now, the aggregate assets under management (AUM) of these funds exceed US$6.9 billion (AU$10.3b), while the AUM of futures-based funds is just US$170 million (AU$254m). The top four ETFs are Bitcoin spot ETFs, and 13 of the 25 best-performing ETFs introduced this year are crypto-based funds, according to The ETF Store.
