21Shares Liquidates Bitcoin, Ethereum ETFs Amid Outflows

21Shares, a prominent player in the cryptocurrency investment space, has announced its decision to liquidate two of its exchange-traded funds (ETFs) that focus on Bitcoin and Ethereum futures. The funds in question are the ark 21Shares Active Bitcoin Ethereum Strategy ETF and the ARK 21Shares Active On-Chain Bitcoin Strategy ETF. This move comes after a routine review and a wave of outflows from these funds.

The last day for investors to buy or sell shares of these ETFs is March 27. On March 28, both ETFs will be officially liquidated. Shareholders who do not sell their shares by the deadline will receive cash based on the value of their shares at the time of the fund's closure. The decision to shut down these funds is driven by the fact that they no longer align with 21Shares' current strategy, given the prevailing market conditions and evolving customer needs.

Despite the liquidation of these two funds, 21Shares and its partner ARK Invest remain committed to offering a range of crypto investment products in the United States. This commitment underscores their continued interest in the cryptocurrency market, even as they adjust their product offerings to better meet market demands.

The ARK 21Shares Active Bitcoin Ethereum Strategy ETF invests in both Bitcoin and Ethereum futures contracts, aiming to outperform holding both assets over a market cycle. Similarly, the ARK 21Shares Active On-Chain Bitcoin Strategy ETF invests in Bitcoin futures contracts and cash equivalents, with the goal of outperforming Bitcoin through the use of standard financial analysis models and on-chain valuation models.

The liquidation of these ETFs highlights the challenges faced by cryptocurrency investment products in the current market environment. Despite the negative returns, 21Shares' decision to liquidate these funds is a strategic move aimed at realigning their product offerings with market conditions and customer preferences. This move also reflects the dynamic nature of the cryptocurrency market, where investment strategies must continually adapt to changing circumstances.

Despite the wave of outflows, the ETF space is sizzling with frenetic activity. Buoyed by impressive returns, 21Shares slashed fees to 0.49% for its Bitcoin Ethereum Core ETPs. Several issuers have filed for XRP, HBAR, DOGE, and AVAX ETFs with the US SEC. For Ethereum investors, CBOE has applied to the SEC to approve staking in Fidelity’s ETH ETF.