Mutual fund and ETF provider VanEck has announced plans to delist the VanEck Bitcoin (BTC) Strategy ETF from the Chicago Board Options Exchange (CBOE) after January 30.
The fund – which trades under the ticker XBTF – is a Bitcoin futures ETF. That means it offers investors Bitcoin price exposure through investing in Bitcoin futures contracts.
VanEck Gives Up Futures ETF
Per the company’s Wednesday statement, VanEck’s Board of Trustees approved a decision to liquidate the fund’s assets based on an analysis of its “performance, liquidity, assets under
management, and investor interest,” among other things.
According to Yahoo Finance data, XBTF averages $1.4 million in daily trading volume. That pales in comparison to the ProShares Bitcoin Strategy ETF (BITO), a competing product that dwarfed all rivals for inflows and volume after being first to launch in October 2021. VanEck’s fund, by contrast, took to the market on November 15, 2021.
As noted by Bloomberg ETF analyst James Seyffart, the ETF industry is generally “winner take most,” with most volumes going to ETFs with a first mover advantage.
Investors are incentivized to gravitate toward the highest volume ETF going forward since higher volumes mean large investors can easily liquidate their holdings. Naturally, that makes it tougher for early buyers of less popular funds to sell their shares down the line.
To compensate for this, VanEck has promised to provide investors with cash distributions equal to the net asset value of their share in the fund after liquidation. The liquidation date is currently scheduled for February 6.
“For tax purposes, shareholders will generally recognize a capital gain or loss equal to the amount received for their shares over their adjusted basis in such shares,” the company noted.
VanEck’s Bitcoin Spot ETF
Last week, VanEck was among several fund managers to receive approval for its Bitcoin spot ETF product, which backs its shares with actual BTC.
Unlike the Bitcoin futures ETFs in 2021, all funds were provided a fair shake to accrue market share through a simultaneous launch. This time around, its VanEck Bitcoin Trust (HODL) has landed near the middle of the pack for flows and volume again, accruing $51 million of volume and $17.9 million in flows over its first three days live.
VanEck has promised to donate 5% of the profits generated by its ETF product to Bitcoin core developers.