21Shares to Liquidate Its Bitcoin and Ethereum Futures-Tracking ETFs

21Shares has announced plans to liquidate two of its actively managed exchange-traded funds (ETFs) that track Bitcoin and Ethereum futures.

Two actively managed exchange-traded funds (ETFs) tracking Bitcoin (BTC) and Ethereum (ETH) futures will be liquidated, asset management firm 21Shares announced on Monday.

The two funds, the ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARCC) and the ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY), will cease trading after the market closes on March 27, and the liquidation will take place on or around March 28.

The move comes amid $1.66 billion in outflows from US-listed spot Bitcoin ETFs this month, according to recent data from Digital Asset Management.

Those two ETFs carry expense ratios of 1% and 0.93%, respectively, and are designed to actively manage Bitcoin and ether futures strategies.

Shareholders who hold their ETF shares until the liquidation date will receive payments from the fund in accordance with their portion of the fund’s net asset value at the time of liquidation, although the recent decline in crypto prices could affect the final value of their investments.

“Shareholders who receive a liquidating distribution will generally realize a capital gain or loss equal to the amount of the net asset value of their shares at the time of liquidation less the cost of their shares,” 21Shares noted.

The firm added that the shares will be valued at the time of liquidation in accordance with the procedures followed in connection with the preparation of the final statement of the fund.

The liquidating distribution will be paid to shareholders on or about April 12, 2024.

Year-to-date, Bitcoin and Ethereum are down 11% and 43% respectively.

Earlier this month, crypto asset management firm Harvest announced plans to liquidate two of its actively managed bitcoin futures ETFs.

The move came after Harvest Global Inv announced in December that it would be closing its Harvest Bitcoin Strategy Fund, which had been the subject of a lawsuit by investors.

The two ETFs, the Harvest Bitcoin Strategy ETF (NYSE:HBTC) and the Harvest Bitcoin Futures ETF (NYSE:CASH), will cease trading after the market closes on March 26, and the liquidation will take place on or around March 27.

The two ETFs carry expense ratios of 0.95% and 0.74%, respectively, and are designed to actively manage bitcoin futures strategies with the aim of generating capital appreciation.

Shareholders who hold their ETF shares until the liquidation date will receive payments from the fund in accordance with their portion of the fund’s net asset value at the time of liquidation, although the recent decline in bitcoin prices could affect the final value of their investments.

“Shareholders who receive a liquidating distribution will generally realize a capital gain or loss equal to the amount of the net asset value of their shares at the time of liquidation less the cost of their shares,” Harvest explained.

The shares will be valued at the time of liquidation in accordance with the procedures followed in connection with the preparation of the final statement of the fund.

Those liquidating distributions will be paid to shareholders on or about April 11, 2024.

The move comes as investors have pulled billions of dollars from crypto markets this month amid the collapse of two major crypto lenders and the liquidation of three actively managed bitcoin futures ETFs.

According to recent data from Digital Asset Management, there has been $1.66 billion in outflows from US-listed spot bitcoin ETFs this month alone.

Those outflows are likely to continue in the coming weeks and months as investors become increasingly risk averse in the current market climate.

As of Monday's morning session, ARCC trades at $21.07, while ARKY trades at $22.34. Meanwhile, HBTC trades at $22.08, and CASH trades at $21.58.