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 stock exchange until the market closes on September 16, 2024.
After that date, the shares will no longer be traded on the exchange and will be officially delisted. Investors are warned that if they sell their shares before that date, they may be charged transaction fees by their brokers.
What the VanEck ETF Liquidation Means for Investors
According to the warningThose who continue to hold shares on the settlement date, which is expected to be on or about September 23, 2024, will receive a cash distribution equal to the net asset value of their shares.
This means that shareholders They will receive a cash amount based on the value of their holdings at the time of settlement, which will be credited to the cash portion of their brokerage accounts.
In addition, shareholders may receive a final distribution of net income and capital gains earned by the Fund that have not been previously distributed prior to liquidation. This may provide investors with an additional advantage. financial benefit as they reduce their investment in the ETF.
VanEck also noted that the final tax status of all distributions made by the Fund, including the liquidation distribution, will be communicated to shareholders through the year-end tax report. This report will clarify the portions of the distribution that may be considered a return of capital, which could impact a shareholder’s basis in their shares.
Earlier this year, the asset manager also closed its Bitcoin ETF futures due to the approval of its Bitcoin spot ETF in January of this year.
However, the announcement made no mention of its recently launched Ethereum spot ETF (ETHV), which is still on the asset manager’s list of offerings despite experiencing significant outflows after it began trading in July.
VanEck leads Ethereum spot ETF outflows
Both Ethereum and Bitcoin Spot ETF markets have experienced significant outflows over the past month, which has further impacted the ongoing price correction seen in the prices of the two largest cryptocurrencies in the market.
The Ethereum ETF market has seen outflows totaling roughly $562 million since its inception on Aug. 19, led by VanEck’s $47 million in outflows over the same period, according to Farside. data.
This has contributed to a nearly 7% drop in the price of ETH, which is currently trading at $2,240. Over the fourteen-day period, ETH is also down nearly 20%. And over the past month, it accounts for 5.6% for the second-largest cryptocurrency on the market.
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