VanEck to Close Futures-Based Bitcoin ETF Following Spot Product Approval

The asset management firm VanEck will close and liquidate its Bitcoin strategy exchange-traded fund, which tracks the performance of Bitcoin futures, following the approval and listing of much-anticipated spot Bitcoin ETFs.

No Place for Futures Bitcoin ETFs

Announced yesterday (Wednesday), the Bitcoin futures-based ETF will continue to list on the Cboe BZX Exchange until 30 January 2024, and investors can liquidate their open positions until then. The fund will automatically liquidate the positions of all shareholders on 6 February 2024.

“VanEck continuously monitors and evaluates its ETF offerings across a number of factors, including performance, liquidity, assets under management, and investor interest, among others,” the company stated in the official press release. “The decision was made to liquidate the Fund based on an analysis of these factors and other operational considerations.”

“Shareholders who continue to hold shares of the Fund on the Fund’s liquidation date, which is expected to be on or about February 6, 2024, will receive a liquidating distribution of cash in the cash portion of their brokerage accounts equal to the amount of the net asset value of their shares.”

Now that our spot bitcoin ETF has been approved, we are closing our ETF that invested in bitcoin futures. https://t.co/pgf8NaKb4a

Spot Bitcoin ETF to Drive Up the Demand

VanEck launched and listed the futures-based Bitcoin ETF, with the ticker XBTF, in November 2021. The product was listed when companies, including VanEck, could not receive the Securities and Exchange Commission’s approval for a spot Bitcoin ETF.

The decision to close VanEck Bitcoin Strategy ETF came only a week after the US regulator approved 11 spot Bitcoin ETFs, all of which are now listed on US stock exchanges. With its spot Bitcoin ETF, VanEck competes with traditional financial giant BlackRock and several other crypto-specific companies. After 7-days of listing, the inflows into the spot Bitcoin ETF of BlackRock have taken the leading position.

$803mil has gone into spot bitcoin ETFs over first 3 days… Nice look here at various dynamics incl ARKW buying ARKB, GBTC outflows, & issuers seeking to launch other bitcoin-related ETFs. Incl color from yours truly. via @kgreifeld @emily_graffeo https://t.co/h9LIqTUgew pic.twitter.com/Zd3dHfpQ7W

While the crypto and mainstream financial services industries see the listing of spot Bitcoin ETF in the US as a landmark event, it failed to significantly impact Bitcoin prices, at least until now.

Further, despite the involvement of mainstream giants like BlackRock, a few players are still skeptical about the crypto product. Vanguard, a mutual fund giant also offering brokerage services, is not providing spot Bitcoin ETFs to its customers, while a few others are still evaluating or supplying them with conditions.