A year after VanEck started closing the Ethereum Futures ETF in September
VanEyck will close the Ethereum Futures ETF (EFUT) on September 16, 2024. EFUT saw lower asset holdings compared to the VanEck Spot Ethereum ETF. In general, Ethereum is facing challenges with competition and network revenue and fees.
VanEek is set to close the Ethereum Strategy ETF (EFUT) on September 16, 2024, with the liquidation expected on September 23.
Launched in October 2023, EFUT has struggled with underperformance and underperformance compared to VanEck's more successful Space Ethereum ETF (ETHV).
Systematic adjustment
VanEck's move to close the EFUT ETF is part of a strategic review of its ETF offerings. In the year Launched in October 2023, EFUT was intended to provide exposure to Ethereum futures, but only raised $21 million in assets, a sharp contrast to Spot's $63 million in net income.
The decision to liquidate EFUT is related to VanEck's ongoing review of factors such as performance, liquidity and investor interest.
EFUT shareholders will receive cash distributions based on the net asset value of their holdings following the closing and liquidation of the ETF.
This shift reflects VanEck's broader strategy to focus on more successful crypto-related products.
Ethereum and Ether Futures ETF Challenges
VanEck's August 2024 Crypto Monthly Recap highlights several challenges contributing to Ethereum's recent price struggle.
According to VanEck's report, Ethereum's decentralized foreign exchange rate will decrease from 42 percent in 2022 to 29 percent in 2024.
The report attributes this decline to a number of factors, including a general decline in network revenue, deliberate policy decisions, and competition from high-profile blockchains such as Solana, Sui, and Aptos. These competitors are drawing speculative demand from Ethereum, which exacerbates the price issues.
In addition, Ethereum's layer-1 revenues have been impacted by competing layer-2 networks, leading to a 99% reduction in network fees since the Denkun update in March 2024. This has intensified the competition in the Ethereum ecosystem and led to the proliferation of layer distribution. -2 solutions, some critics say that the current number of Ethereum scaling solutions exceeds the necessary demand.
While continuing to offer other crypto-related products such as the Digital Assets Mining ETF (DAM) and Bitcoin Strategy ETF (XBTF), the decision to close EFUT underscores Ethereum's ongoing involvement with digital assets as it weathers the challenges it faces.
