- VanEck is closing its Bitcoin futures ETF (XBTF) due to poor performance, low trading volume, and assets under management compared to competitors.
- XBTF will stop trading on January 30th and liquidate remaining assets by distributing cash payouts to investors.
- VanEck received approval for a spot Bitcoin ETF last week and is shifting focus to growing that product instead of the unsuccessful futures ETF.
The VanEck Bitcoin Strategy ETF (XBTF) will stop trading on January 30th, just over a week after the asset manager received approval for a spot Bitcoin ETF. The futures-based fund has struggled to gain traction amid stiff competition.
VanEck Decides to Close Bitcoin Futures ETF
VanEck made the decision to liquidate XBTF based on an analysis of the fund’s performance, liquidity, assets under management and investor interest. The ETF has averaged just $14 million in daily volume, well behind rival futures ETFs like ProShares’ BITO. As the ETF industry tends to be “winner take most,” it has been difficult for later entrants like XBTF to accrue significant volume.
To ease the liquidation process, VanEck will distribute cash payouts to investors equal to the net asset value of their shares. Investors will generally recognize a capital gain or loss on the difference between the payout amount and their adjusted cost basis. The final liquidation date is set for February 6.
VanEck’s New Spot Bitcoin ETF
Last week, VanEck received approval to launch a spot Bitcoin ETF, VanEck Bitcoin Trust. Unlike the previous futures ETFs, VanEck’s spot ETF launched simultaneously with competing products. After three days of trading, the fund has garnered moderate volume and assets under management compared to rivals.
VanEck has pledged to donate 5% of the ETF’s profits to Bitcoin core developers. The asset manager appears to be shifting focus to its spot ETF going forward given the lack of traction for its futures product.
Conclusion
After failing to attract significant interest, VanEck is shutting down its Bitcoin futures ETF just over a week after launching a spot Bitcoin ETF. The quick demise highlights the intense competition in the ETF space and the advantage held by early movers. VanEck will now look to gain market share with its spot Bitcoin offering.
