Top investment asset management firm VanEck has decided to cease and liquidate its Ethereum ETF Futures (EFUT) listed on the Chicago Board Options Exchange (CBOE). This is not entirely positive news for Ethereum, considering it has struggled in the last few weeks.
Following the news, Ethereum’s price dropped by 6.1% in the last 24 hours and was trading at $2,224.93.
VanEck Checks For Ethereum Futures’ Liquidity
Currently, there is a broader market downturn in the crypto market, fuelling many assets to lose a significant amount of their value. VanEck has named a couple of reasons for making this move, amongst which are performance woes and waning market interest.
VanEck was clear on how the ongoing market challenges and low investor demand weighed on the Ether Futures ETF’s performance. To reach this point, VanEck conducted a thorough review of its product offerings, focusing on liquidity, performance, and overall investor demand.
The findings from this review made it obvious to the asset manager that EFUT has failed to meet crucial expectations, hence the winding down decision. Consequently, shareholders have until September 16, 2024, to sell their EFUT shares on CBOE.
Once this date elapses, any EFUT holder will only be entitled to a liquidating distribution based on their holdings’ net asset value. This value will hinge on the figures from the liquidation date of September 23, 2024.
Will Other Issues Walk Away From Ethereum Futures ETF?
Generally, there is a rising concern about Ethereum Futures ETF offerings. In the next few weeks, other issuers may equally pull out of the offering. Currently, Ethereum is not performing any better to convince them otherwise.
At some point, even Grayscale pulled out of the application for the offering with the United States Securities and Exchange Commission (SEC). However, VanEck’s decision was also driven by strategic portfolio streamlining following the approval of its Spot Ethereum ETF.
When the regulator approved spot Bitcoin ETFs in January, VanEck also decided to cease its Bitcoin Futures ETF. This decision reflects the company’s deliberate shift towards spot market offerings. In the meantime, its spot Bitcoin and Ethereum ETFs have recorded some success thus far.
Despite the losses the product category has recorded in the past month, VanEck has registered a cumulative inflow of $63 million. This figure fares better than Grayscale’s ETHE which has shed over $2.6 billion
VanEck Remains Optimistic About Spot Solana ETFs
A few months back, the firm filed for a spot in Solana (SOL) ETF with the US SEC. Just when it felt like the offering would be considered for trading, CBOE delisted its Solana ETF 19b-4 filing. This move came alongside that of 21Shares.
Until now, the investment asset management firm remains hopeful that the SEC will approve the offering.
As against the thought that the company may have refrained from its pursuit for an ETF with Solana as the underlying cryptocurrency, its head of digital assets research, Matthew Sigel, noted that the filing is still effective and important to its long-term approach.
Therefore, VanEck is contacting exchange partners and regulators to realize the Solana ETF dream.
