Asset manager VanEck is shuttering its futures-based Ether (ETH) 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 said.
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,” said Nate Geraci, president of The ETF Store — an investment adviser — in a post on the X platform. In 2023, Geraci predicted 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.
Top ETF launches in 2024. Source: The ETF Store
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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.
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.
Fund issuers launched nine spot Ether ETFs in July. The largest — the Grayscale Ethereum Trust (ETHE) — manages nearly $4.2 billion, according to Morningstar.
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 (BTC).
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 13 of the 25 largest ETF launches in 2024 by year-to-date inflows.
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