VanEck Bitcoin Strategy ETF to Shut Down Just One Week After Spot ETF Approval

VanEck Bitcoin Strategy ETF to be Delisted

Mutual fund and ETF provider VanEck has announced that it will be delisting the VanEck Bitcoin (BTC) Strategy ETF from the Chicago Board Options Exchange (CBOE) after January 30. The ETF, which trades under the ticker XBTF, offers investors exposure to Bitcoin prices through investing in Bitcoin futures contracts.

VanEck Gives Up Futures ETF

VanEck’s decision to liquidate the fund’s assets is based on an analysis of its performance, liquidity, assets under management, and investor interest. The XBTF ETF has an average daily trading volume of $1.4 million, much lower than its competitor, the ProShares Bitcoin Strategy ETF (BITO), which saw significant inflows and volume after being launched in October 2021.

The ETF industry tends to favor first movers, making it difficult for less popular funds to attract investors. As a result, VanEck plans to provide cash distributions to investors equal to the net asset value of their shares after liquidation. The liquidation date is scheduled for February 6.

VanEck’s Bitcoin Spot ETF

Last week, VanEck received approval for its Bitcoin spot ETF product, which is backed by actual BTC. Unlike the Bitcoin futures ETFs in 2021, all funds were given an equal opportunity to gain market share through a simultaneous launch. VanEck’s Bitcoin Trust (HODL) has performed moderately well in terms of flows and volume since its launch.

In addition, VanEck has committed to donating 5% of the profits generated by its ETF product to Bitcoin core developers.

Hot Take: VanEck Delisting BTC Futures ETF Signals Market Shift

The delisting of VanEck’s Bitcoin Strategy ETF suggests a shift in the market dynamics of cryptocurrency investment. The lower trading volume and investor interest in the XBTF ETF compared to its competitor, BITO, indicates a preference for first mover advantage in the ETF industry.

VanEck’s decision to liquidate the fund’s assets and compensate investors with cash distributions reflects the challenges faced by less popular funds in attracting and retaining investors. However, VanEck’s approval for its Bitcoin spot ETF product shows potential for success in the market.

Overall, this development highlights the evolving landscape of cryptocurrency investment products and the importance of market timing and investor sentiment in determining their success.