In a move that reflects the evolving landscape of cryptocurrency investment products, VanEck has announced that it will be closing its futures-based Ethereum Strategy ETF (EFUT) due to a lack of investor interest. The fund will cease trading on September 16 and will be liquidated on or around September 23.

The decision to shutter EFUT comes as investors increasingly prefer spot-based ETFs over older futures-based funds. This trend is evident in the performance of VanEck’s own Ethereum ETFs, with the spot-based VanEck Ethereum ETF (ETHV) launched in July, attracting significantly more assets under management (AUM) than its futures-based counterpart.

As of now, EFUT has approximately $21 million in AUM, while ETHV boasts around $55 million in AUM, despite being launched over a year later. This disparity in investor interest is not unique to VanEck, as the broader crypto-ETF market has seen a significant shift towards spot-based funds.

The US Securities and Exchange Commission (SEC) licensed nine spot Ethereum ETFs to begin trading in July, which have collectively amassed over $6.9 billion in AUM. In contrast, futures-based funds have only managed to attract around $170 million in AUM.

Nate Geraci, President of The ETF Store, had predicted this trend in August 2023, stating that if licensed, spot-based crypto ETFs would render the older futures-based ETFs obsolete. Geraci commented on VanEck’s decision to close EFUT, saying it was “no surprise” given the current market dynamics.

The rise of spot-based ETFs has also been reflected in the performance of the top-performing ETFs launched this year. According to The ETF Store, 13 of the 25 top-performing ETFs are crypto-based funds, with the top four being Bitcoin spot ETFs.

This shift towards spot-based ETFs is likely to continue, as investors increasingly seek more direct exposure to cryptocurrencies. As the market continues to evolve, it will be interesting to see how other asset management companies adapt to this changing landscape.

Key Takeaways:

• VanEck is closing its futures-based Ethereum Strategy ETF (EFUT) due to a lack of investor interest.
• Spot-based ETFs are increasingly preferred by investors over older futures-based funds.
• The US Securities and Exchange Commission (SEC) licensed nine spot Ethereum ETFs in July, which have collectively amassed over $6.9 billion in AUM.
• The top-performing ETFs launched this year are predominantly crypto-based funds, with the top four being Bitcoin spot ETFs.
• The shift towards spot-based ETFs is likely to continue, as investors seek more direct exposure to cryptocurrencies.