VanEck plans to terminate its Ethereum Strategy ETF (EFUT) by September 16, 2024, and expects to complete the liquidation process by September 23.
EFUT, which was introduced in October 2023, has faced challenges in terms of limited growth in assets and performance when compared to VanEck’s more prosperous spot Ethereum ETF (ETHV).
VanEck’s decision to liquidate EFUT is in line with its continuous evaluation of criteria such as performance, liquidity, and investor interest. EFUT shareholders will be given cash payments determined by the net asset value of their assets after the ETF is closed and liquidated.
The August 2024 Crypto Monthly Recap by VanEck identifies certain obstacles that have contributed to the recent difficulties in Ethereum’s price. The proportion of decentralized exchange trading volume accounted for by Ethereum has experienced a substantial decline, decreasing from 42% in 2022 to 29% in 2024.
This can be attributable to various factors, including a reduction in network revenue, intentional policy choices, and competition from blockchains with greater transaction processing capabilities, such as Solana, Sui, and Aptos.
In addition, the presence of other layer-2 networks has had a significant influence on the money generated by Ethereum’s layer-1 network. This has resulted in a drastic 99% decrease in network fees after the implementation of the Dencun upgrade in March 2024.
VanEck’s choice to terminate EFUT while maintaining its offering of other cryptocurrency-related products, such as the Digital Assets Mining ETF (DAM) and Bitcoin Strategy ETF (XBTF), highlights the firm’s continued involvement with digital assets despite the difficulties Ethereum is currently undergoing.
