VanEck will shut down its Ethereum Futures ETF (EFUT) by September 16, 2024, with the liquidation scheduled for September 23. The ETF, which launched in October 2023, has faced underwhelming asset accumulation and performance compared to VanEck’s more successful spot Ethereum ETF, ETHV.
EFUT, designed to offer exposure to Ethereum futures, has only accumulated $21 million in assets, in stark contrast to the $63 million net inflows of the spot Ethereum ETF. The decision to close EFUT is part of VanEck’s strategic review of its ETF lineup, focusing on performance, liquidity, and investor interest.
Shareholders of EFUT will receive cash distributions based on the ETF’s net asset value following its closure and liquidation.
Ethereum has faced several challenges recently. VanEck’s August 2024 Crypto Monthly Recap notes that Ethereum’s share of decentralized exchange trading volume has dropped from 42% in 2022 to 29% in 2024. This decline is attributed to reduced network revenue, policy changes, and competition from faster blockchains like Solana, Sui, and Aptos, which have attracted speculative interest away from Ethereum.
Additionally, Ethereum’s layer-1 revenues have been adversely affected by competing layer-2 networks, leading to a significant decrease in network fees since the Dencun upgrade in March 2024. The rise of layer-2 solutions has intensified competition within Ethereum’s ecosystem, with some suggesting that there are now more scaling solutions than needed.
VanEck’s decision to close EFUT while continuing to support other crypto products like the Digital Assets Mining ETF (DAM) and Bitcoin Strategy ETF (XBTF) reflects the firm’s commitment to the digital assets sector despite Ethereum’s ongoing challenges.
