- VanEck announced it would be closing its Bitcoin Strategy ETF, which follows Bitcoin futures contracts
- The company had a total net asset of over $50 million in the ETF, at press time
American investment management firm – VanEck has announced that it will liquidate and close Bitcoin (BTC) strategy ETFs. The announcement comes days after the U.S. Securities and Exchanges Commission (SEC) approved its spot Bitcoin ETF application. Notably, both the exchange-traded funds are different from each other.
The spot Bitcoin ETF tracks the price of Bitcoin in real time, meaning that the product provider will purchase and own BTCs. Meanwhile, VanEck’s Bitcoin Strategy ETF is linked to Bitcoin futures contracts and does not directly invest in BTCs.
Factors leading to the closure of the Bitcoin ETF
The company said that the decision to liquidate the ETF was influenced by performance, liquidity asset under management, investors interest, and operational considerations among other factors. Moreover, the fund will officially be delisted at the end of this month, January 30, 2024, giving investors about two weeks time to sell their shares.
If the shares remain unsold, the company said it will distribute cash proportionate to “the amount of the net asset value of their shares” after the liquidation of the ETF. The liquidation date is set to happen around February 6, 2024.
Notably, the company had launched the product in November 2021. At press time, the ETF total net assets of $53.29 million with a net asset value of $39.47. The year-to-date returns were noted to be 1.65%, as per the official website of VanEck.
Subsequently, spot Bitcoin ETFs have been steadily gaining pace. The total flow of the multiple spot Bitcoin ETFs has seen a significant inflow, while the situation remains the opposite for Grayscale. In a Tweet, BitMEX Research said,
Bitcoin Spot ETF Flow – Day 3 Update
After three days, the total net flow situation is as follows:
1. Blackrock +$712m 🥇
2. Fidelity +$525m 🥈
3. Bitwise +$306m 🥉
4. Ark +$229m
…
11. Grayscale -$1,162m pic.twitter.com/fLJhF5r0YU— BitMEX Research (@BitMEXResearch) January 17, 2024
On this development, Eric Balchunas – Senior ETF Analyst for Bloomberg, said,
Let me put into context how insane $10b in volume is in first 3 days. There were 500 ETFs launched in 2023. Today, they did a COMBINDED $450m in volume. The best one did $45m. And many have had months to get going. $IBIT alone is seeing more activity than the entire '23 Freshman… https://t.co/wV1zQFtPW1
— Eric Balchunas (@EricBalchunas) January 16, 2024
