VanEck is set to close its bitcoin futures ETF, just one week after the launch of its spot bitcoin exchange-traded fund. This decision comes in the wake of substantial outflows leading up to the launch of the spot fund.
The VanEck Bitcoin Strategy ETF (XBTF) will cease trading on January 30, as per the company’s press release. VanEck, a New York-based firm managing $66.4 billion across 69 ETFs, cited an analysis of the fund’s performance, investor interest, liquidity, assets under management, and other factors as reasons for its closure.
Despite a 97% increase in the past year and holding $69 million in assets, the futures fund experienced significant outflows, with investors withdrawing $14.8 million since December 1. The anticipation of federal regulators approving a spot bitcoin ETF led to a rush of withdrawals, with $10 million pulled from the ETF on December 26 and an additional $2 million on January 15.
The emergence of spot bitcoin ETFs raised questions about the survival of futures-based bitcoin ETFs, which currently hold about $2 billion in assets. According to Sumit Roy, an analyst at etf.com, while bitcoin futures ETFs delivered strong returns, they incurred higher costs, particularly in roll costs, which impacted their overall returns.
Despite the challenges faced by futures-based ETFs, the ProShares Bitcoin Strategy ETF (BITO), the largest bitcoin futures ETF, maintained its resilience, boasting nearly $2 billion in assets under management. BITO’s first-mover advantage contributed to its ongoing success in the market.
VanEck has not yet responded to inquiries seeking comment on the closure of its bitcoin futures ETF.
