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VanEck to Close Ethereum Futures ETF, Shifts Focus to Spot ETP

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In a significant shift of focus for its crypto-related products, VanEck has announced it will soon shut down and liquidate its Ethereum futures ETF, known as the VanEck Ethereum Strategy ETF (EFUT). This decision, unveiled on September 5, comes on the heels of the approval of VanEck’s spot Ethereum exchange-traded product (ETP), reflecting a strategic pivot towards direct cryptocurrency exposure.

VanEck is an important player in the ETF market, which has recently attracted a lot of investors. Earlier this year, in January 2024, it stirred a lot of news when it closed its Bitcoin futures ETF just after launching its Bitcoin spot ETF. This move was the first of many future products that firms would rather prefer to spot ETFs over futures products on account of their simplicity and direct correspondence with the underlying asset.

Strategic Shift to Spot Ethereum ETP

As per the VanEck press release, the liquidation of the EFUT fund was planned as a result of a comprehensive analysis of many factors, such as the ETF’s performance, liquidity, heaps of assets under management, and the interest of investors. In this way, the VanEck Ethereum Strategy ETF, which is traded on CBOE, will no longer be in operation.

Holders of shares in the ETF have until September 16 to sell their shares on the CBOE. After that, the shares will no longer be available for trading, and the ETF will be delisted. The liquidation process is set to officially start on or about September 23.

As of this date, the shareholders will be given a cash distribution equal to the net asset value of their holdings if they hold onto their shares. This last distribution will be carried out around the same period, and the shareholders will be expecting a capital gain or loss depending on their adjusted basis in the shares.

Moreover, as of September 16, Van Eck will also stop accepting creation orders from authorized participants. In the course of liquidation, the shareholders may receive the final distribution of any net income and capital gains earned by the ETF but not yet distributed.

In terms of taxes, the liquidation will be listed in the year-end tax documents, about which the tax authorities will inform of any returns of capital and the implications for the shareholders’ tax liabilities. The dissolution is the terminal stage in EFUT’s life cycle and demonstrates the shift of VanEck towards its spot Ethereum ETP, this also being part of a bigger development within the investment world, which is the preference of the cryptocurrency itself than trading in its contracts.

Related Reading | U.S. Corporations to Invest $10.35 Billion in Bitcoin, River Report Predicts

VanEck Leads the Way with Amended S-1 for Spot Ethereum ETF

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In a move that might prove pivotal in shifting cryptocurrency market fortunes, Ethereum exchange-traded funds see action as major financial players jockey for approval. Early Monday, VanEck filed an amended S-1 registration statement for its spot Ethereum ETF, detailing minor changes to custody arrangements.

Following the lead from VanEck, several other companies, including 21Shares, BlackRock, Fidelity, Franklin Templeton, and Grayscale, made their filings with the regulator a little later on in the day. Market insiders speculate that trading for these ETFs could commence around the 15th of July.

Bloomberg ETF analyst Eric Balchunas provided insight into the wave of filings, noting that VanEck’s S-1 amendment was the first to be submitted. “VanEck already had their fee structure in place, so there wasn’t much new in their filing. It’s more about putting the ball back in the SEC’s court. We expect the rest of the filings to come in today, except for Bitwise, who completed theirs last week,” Balchunas explained

The journey for these spot Ethereum ETFs began on May 23 when the Securities and Exchange Commission (SEC) approved the issuers’ 19b-4 applications. However, before these ETFs can begin trading, the SEC must also approve the S-1 registration statements. July 15 is the anticipated trading date.

Golem Sells 24,400 ETH Worth $72M Despite Market Uptick

Contrary to recent optimistic changes in the cryptocurrency market, data from Lookonchain has pointed to an overwhelming move from Golem. In the past three days, Golem has sold 24,400 ETH (around $72 million in value) on leading cryptocurrency exchanges such as Binance, Coinbase, and Bitfinex

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Currently, Golem still holds a substantial amount of 127,634 ETH, worth around $372 million. Golem, which raised 820,000 ETH during its ICO in November 2016 when the price of Ethereum was just $10.20, has seen its holdings grow tremendously in value as ETH’s price soared.

Analyst Predicts ETH Could Surpass $5,000

Renowned crypto analyst Trader Tardigrade has shared an optimistic forecast for Ethereum’s price trajectory despite Golem’s recent sell-off. According to him, Ethereum is forming a second Descending Triangle pattern, which historically suggests a potential breakout within the coming months. He predicts that during the next bull run, Ethereum could surpass the $5,000 mark.

The recent sell-off did not hamper the ETH price; at the time of writing, Ethereum is trading at $3,093.24, with a 24-hour trading volume of $34.16 billion. The market capitalization stands at $371.61 billion. The price of ETH has risen by 2.50% during the last 24 hours.

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VanEck Leads the Way with Amended S-1 for Spot Ethereum ETF 3

Related Reading |  Chainlink Faces Critical $12.95 Support Amid 8% Decline, Bulls Await Rally 

Solana Gains 9%: VanEck ETF Fuel Rally

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Solana and Avalanche are both seeing nice gains as crypto rebounds. Specifically, SOL’s price has surged by approximately 9% in the last 24 hours driven by the optimism of VanEck’s filing for an ETF. This surge highlights the significant impact of positive investor sentiment and crowd optimism on the market.

An ETF (Exchange-Traded Fund) focused on Solana indicates a significant endorsement from traditional financial institutions, allowing mainstream investors to gain exposure to the digital asset. This could drive a substantial influx of investment and interest in the chain. As the crypto community anticipates the next course of action, one cannot ignore the impact of meme coins’ contributions to Solana’s rising prominence.

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Solana Gains 9%: VanEck ETF Fuel Rally 5

In earlier market cycles, the primary focus appeared to be on blockchain projects’ underlying technology and utility. While these aspects are crucial, they can be complex and challenging to explain to the average person, hindering widespread understanding and adoption.

Here’s when meme coins bring a universal appeal due to their simplicity and cultural relevance. Proponents believe this asset class can potentially bring new users to the crypto space as they are easy to understand, share, and engage with. Solana has emerged as a preferred platform for meme coins, boasting the highest trading volume and becoming the go-to chain for meme-based projects.

Solana’s Meme Coin Dominance Propel Market Status

The combination of being a top choice for meme coins and the potential launch of an SOL ETF positions the altcoin uniquely in this bull run. It has the potential to attract a broad spectrum of new users and investors, significantly boosting its adoption and solidifying its status as a leading blockchain in the market.

Amidst the price surge, Santiment warns investors and traders that the altcoin rally is being accompanied by traders FOMO’ing in, which means the rally is less likely to continue. In contrast, AVAX’s rally is being mostly ignored by the crowd, which means the rally is more likely to continue.

Additionally, traders should also keep an eye on how markets fluctuate based on Coinbase’s lawsuit against the SEC & FDIC for their document restrictions.

Ethereum ETFs Massive Launch: VanEck’s No Fees Until 2025

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Spot Ethereum exchange-traded funds (ETFs) could debut any day now, with fees being a critical last hurdle for prospective issuers. In a strategic move, investment management firm VanEck announced it will waive fees for its Ethereum ETF until 2025 or until the fund hits $1.5 billion in assets, whichever comes first.

Once either milestone is reached, VanEck’s ETF will charge a 0.20% fee. Matthew Sigel, VanEck’s head of digital assets research, highlighted the firm’s bold strategy on X (formerly Twitter). “VanEck aims to be a leader on crypto ETF fees even if it means we lose money at the outset,” Sigel stated. “The plan is to make it up on volume; in this case, decentralized finance volume.”

Sigel believes that ETH ETFs could spark renewed interest in Ethereum, boosting network activity and, consequently, the price of Ether. This would benefit VanEck’s holdings. He hinted at potential interest in Ethereum DeFi projects such as Curve or Aave.

This approach mirrors VanEck’s strategy for its spot Bitcoin ETF, which also waives fees until reaching $1.5 billion in assets or March 31, 2025. To date, the Bitcoin ETF has accrued $614 million, making it the sixth-largest spot Bitcoin ETF.

Ethereum ETF Fees prospective Issuers

Out of nine prospective issuers, only VanEck and Franklin Templeton have disclosed their Ethereum ETF fees. Franklin Templeton will offer a 0.19% fee, the same as for its Bitcoin ETF. According to Bloomberg Intelligence ETF analyst Eric Balchunas, issuers typically disclose fees late in the launch process. Many are waiting for BlackRock to set the benchmark.

“What BlackRock is going to charge is probably the single most important missing variable outside of the exact launch date,” Balchunas posted on X. He noted that VanEck and Franklin Templeton’s aggressive fee strategies could pressure BlackRock to offer fees below 0.30%. Balchunas added,

“Ethereum ETFs seem poised to have fees as low or even lower than Bitcoin ETFs.”

A unique challenge for Ethereum ETFs is that investors cannot stake their holdings through these funds to earn a 3% yield, unlike through exchanges and decentralized platforms. Adam Morgan McCarthy, an analyst at Kaiko Research, questioned the appeal, stating, “Even paying 0.20% without the staking element seems like a nonstarter to me.”

As the launch of Ethereum ETFs approaches, the fee war among issuers intensifies, with potential implications for the future of crypto investment.

VanEck’s Ethereum Prediction: $2.2T Asset by 2030

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Prominent asset management firm VanEck has released a new analysis on Ethereum, the second-largest crypto in the world. Following the approval of spot Ether ETFs on U.S. stock exchanges, the token has gained widespread traction across the broader financial market. Now financial advisors and institutional investors can hold Ether with the security of qualified custodians, benefiting from the pricing and liquidity advantages characteristic of ETFs.

VanEck, in its latest analysis, has reevaluated the fundamental investment case for the altcoin focusing on how Ether interacts with Bitcoin [BTC] in a traditional 60/40 portfolio, as well as the tradeoff between risk and return. Per the AUM, Ethereum’s ETF approval positioned the network favorably in the eyes of crypto entrepreneurs, traditional financial market participants, and, Big Tech firms. If the leading altcoin continues its stronghold among smart contract platforms, a credible path to $66 billion in free cash flow to token holders supports a $2.2 trillion asset, or $22,000 per coin, by 2030.

Ethereum: VanEck Sees $4T Settled and $66B in Free Cash Flows

With around 20 million monthly active users, the Ethereum network has settled $4 trillion in value and facilitated $5.5 trillion in stablecoin transfers over the last twelve months. VanEck’s 2030 valuation of ETH is based on a forecast of $66 billion in free cash flows generated and accruing to the ETH token, with an estimated 33x valuation multiple on those cash flows.

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VanEck's Ethereum Prediction: $2.2T Asset by 2030 7

The analysis begins by estimating the market size of business sectors that blockchain applications will disrupt, leading to a total addressable market (TAM) of $15 trillion.

We project ETH’s 2030 valuation based upon a forecast of $66B in free cashflows generated by Ethereum and accruing to the ETH token. We estimate 33x valuation multiple on those cashflows. As Ethereum is a platform for applications, we begin our valuation by estimating the market size of business sectors that blockchain applications will disrupt. We estimate the total addressable market (TAM) to be $15T based on annual revenues in these industry verticals

As Ethereum evolves and expands its applications, the model incorporates increased ETH supply burn, greater market capture, and higher take rates on economic activities. These changes reflect the network’s growing fundamentals, recent innovations, and shifting regulatory landscape in the U.S.

Ethereum Layer2 Market Primed for Explosive Growth: VanEck Report

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The Ethereum Layer 2 market is poised to surge to extraordinary heights, with a projected valuation exceeding $1 trillion by 2030, as outlined in a comprehensive report by investment giant VanEck.

VanEck’s valuation methodology, based on a free cash flow multiple of 25 applied to anticipated future cash flows, anticipates a substantial market share of 60% within the Ethereum ecosystem. This estimation hinges on the capacity of Layer 2 networks to effectively handle transaction volumes and maximize revenues derived from blockchain activities.

The report indicates a staggering net revenue estimate of $41 billion for the Layer 2 market by 2030, culminating in a fully diluted valuation of $1.02 trillion. Currently, Layer 2 tokens command a market cap of $33.3 billion, underlining the significant growth potential identified by VanEck.

Ethereum has grappled with scalability hurdles, leading to congestion and soaring transaction fees during peak usage periods. Layer 2 solutions offer a viable remedy, facilitating increased transaction throughput and reduced fees by processing transactions off the primary blockchain while upholding Ethereum’s security standards. Consequently, Ethereum’s base chain transactions have witnessed a substantial decline with the proliferation of Layer 2 implementations.

Innovations Boost Ethereum’s Transaction Cost-Efficiency

VanEck’s meticulous analysis encompassed 46 Layer 2 networks, evaluating factors such as transaction economics, user experience, and ecosystem robustness to gauge viability. Zero-knowledge rollups, though incurring higher fixed costs, boast efficient transaction processing, with innovations like EIP-4844 further enhancing cost-effectiveness.

Optimistic rollups, on the other hand, streamline transaction verification processes, prioritizing efficiency and scalability. However, the divergence in trust models underscores the nuanced trade-offs inherent in Layer 2 design.

Developer experience emerged as a pivotal factor, with EVM compatibility influencing platform adoption. Nevertheless, the quest for optimization has spurred the adoption of specialized languages, underscoring the balance between leveraging Ethereum’s developer ecosystem and enhancing Layer 2 efficiency.

User experience remains paramount, with seamless asset management and integration being key determinants of adoption. Zero-knowledge rollups offer expedited access to funds, emphasizing the importance of frictionless transactions in enhancing user engagement and retention.

Furthrmore, the Ethereum Layer 2 market’s meteoric rise underscores the pivotal role of scalability solutions in realizing Ethereum’s full potential. With a confluence of technological innovation and market dynamics, Layer 2 networks are poised to reshape the blockchain landscape, driving unparalleled growth and adoption in the coming decade.

VanEck Slashes Fees For 12 Months: Is Grayscale Next?

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VanEck waives all trading fees for its Bitcoin ETF [HODL] from the period starting on March 12, 2024, until March 31, 2025, or until the trust’s assets exceed $1.5 billion. According to the latest update, the sponsor fee charged on assets over $1.5 billion before and after March 31 will be 0.20%. All investors will incur the same sponsor fee, which is the weighted average of those fee rates.

VanEck’s announcement has heated up the ETF race as the fee war rages on. The elimination of fees for one year has generated excitement among investors, given how HODL has been lagging behind the other ETFs. From being once the third-highest BTC fund trailing behind GBTC and IBIT with a daily average of $17 million, trading volume on HODL fell sharply despite lowering its expense ratio from 0.25% to 0.20%. 

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VanEck Slashes Fees For 12 Months: Is Grayscale Next? 9

Currently, the trust fund is experiencing the second-slowest total flow, trailing behind only Wisdom Tree Funds, with a daily inflow approaching $3 million. This is worrisome, particularly in the context of a broader bullish market. Therefore, the decision to reduce fees was deemed necessary and logical under these circumstances.

Previously, another major ETF entity, BlackRock, secured a 12-month fee waiver as opposed to the initially reported 6-month duration. This development unfolded amidst a dynamic landscape of fee competition among Bitcoin ETF filers, as detailed by Bloomberg ETF analyst James Seyffart. In the ongoing fee war, Bitwise Invest claims the lowest long-term fee at 0.24%, closely followed by vaneck_us at 0.25%. Notably, two ETFs offered fee waivers for the initial 6 months, reducing their fees to 0.0%, while BlackRock has opted to waive 0.20%.

VanEck Fee Waiver Amidst Bitcoin Rally

With VanEck’s decision to remove fees, industry analysts are anticipating similar strategies from its counterparts, particularly Grayscale. If the negative trend persists, GBTC is likely to lower its fees.

Continuing its giant strides, Bitcoin broke past the $71,000 level, a move that not only shattered the $69,000 and $70,000 benchmarks but also set a new standard for the cryptocurrency’s potential. With 19,651,000 BTC in circulation, the coin has trounced silver. Bitcoin’s market capitalization stands at 1.4 trillion dollars, compared to silver’s 1.38 trillion dollars.

VanEck’s HODL ETF Sees Massive Spike in Trading Volume

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VanEck’s HODL, an American-listed bitcoin ETF, saw its trading volume take off sharply on Tuesday as retail investors poured into the fund. The ETF that tracks the spot price of bitcoin saw volumes over $400 million, a 2,200% rise from its daily average of $17 million. The move came ahead of scheduled fee reduction for the fund, which will lower its expense ratio from 0.25% to 0.20% on Wednesday.

11 bitcoin ETFs were given the green light by the SEC on January 10th, 2024, after years of regulatory uncertainty and delays. The objective of the fund is to give investors access to the largest and most liquid cryptocurrency without any need for them to purchase, store, or secure it themselves.

In the case of HODL, the third-highest bitcoin ETF trading volume was recorded on Tuesday, as per blockworks data. This followed behind GBTC and IBIT by Grayscale and BlockRock, respectively, which are leading in this field. Moreover, the number of its shares has grown to almost $200 million by February 20th, thereby making it one of the most capital-rich Bitcoin ETFs ever.

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Source: Blockworks.co

ETF Surge Sparks Retail Investor Speculation

Though the sudden jump in HODL’s volume is not clear, some analysts think it might have been driven by retail investors that social media or online platforms could have influenced. Bloomberg Intelligence senior ETF analyst Eric Balchunas stated on X that the volume came from 32K individual trades rather than a single large buyer.

Given how sudden and explosive the increase in the number of trades was (500 trades Friday, 50,000 trades today), I’m wondering if some Reddit or TikTok influencer type recommended them to their followers. Feels retail army-ish, said Balchunas.

In the stock market, as well as in the crypto market, retail investors have been widely recognized for inciting huge movements by collaborating together on platforms such as Reddit’s WallStreetBets or TikTok’s CryptoTok. In January 2024, a group of small traders made the shares of GameStop, a game retailer that was already struggling, shoot up in price dramatically through buying call options and squeezing out short sellers.

The rise in HODL’s volume shows how bitcoin ETFs are becoming popular among investors who prefer regulated channels of investing in this digital asset. Investors have poured billions into Bitcoin ETFs ever since they were launched to cash on its price ascent and volatility.

Bitcoin, the leading cryptocurrency, has been on a bull run since late 2023 and hit new highs above $52,000 in February 2024. The digital currency has been helped by a number of things, including more institutional adoption, regulating clarity, as well as invention and scarcity.

Related Reading | Circle Ceases USDC Support on TRON: TRX Holds Strong Amid Transition

VanEck’s $1.75M SEC Fine Highlights Crypto-Finance Intersection Scrutiny

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VanEck, a well-known financial firm, is currently facing legal issues after being fined $1.75 million by the SEC for issues related to its Spot Bitcoin ETF. This has brought to light the challenges that businesses operating at the intersection of cryptocurrencies and traditional finance are facing, leading to discussions in both circles.

VanEck caused a problem by not disclosing that Portnoy, a well-known social media personality, helped them launch their new exchange-traded fund (ETF). The VanEck Social Sentiment ETF, which came out in 2021, tries to copy an index that counts positive sentiment on social media.

VanEck’s Regulatory Scrutiny

The SEC review found that the fund’s management fee structure hid important information about Portnoy’s role and payments made in exchange for ETF board approvals.

The SEC has also found major oversight and tracking holes in the spot Bitcoin market that could put investors at risk. Because of this, the SEC has been tough on VanEck’s cryptocurrency projects, showing how important it is for the quickly growing cryptocurrency industry to follow strict rules.

Regulators are paying more attention to the Bitcoin space after this event. For instance, TradeStation Crypto, Inc., a financial services company based in Florida, agreed to pay $3 million to the SEC and state officials for selling cryptocurrency lending products without a license.

As part of its investigation into Binance, the U.S. Justice Department has also offered a $4 billion fine. It shows that noncompliance with regulatory standards and anti-money laundering laws has been more strictly enforced since 2018.

The Binance litigation sets a standard for how algorithms can be used on cryptocurrency exchanges and how important it is for regulators to keep an eye on things to improve the whole crypto ecosystem. A strong message is sent about how important it is for companies to follow the rules and do business in a structured way.

Market oversight and following the rules are very important, as VanEck’s problems at the point where traditional and digital banking meet show. The harsh SEC penalties are a stark warning of how important it is to be honest and follow the rules to stop system manipulation and protect the market’s integrity.

VanEck Leads The Charge Towards Ethereum ETF With SEC Filing

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VanEck, a well-known investment firm, has demonstrated a surge in the development of an Ethereum Exchange-Traded Fund (ETF) by filing an S1-A form with the Securities and Exchange Commission (SEC). According to Mr. Seyffart, a renowned analyst in the field of ETFs at Bloomberg who has been evaluating the issues, this step was another move in the course of VanEck’s relentless efforts to deal with the regulatory environment of the product.

The competition for the coveted spot for the Ethereum ETF is hotter up, with VanEck’s application joining the list of the other contenders, all chasing approval from the SEC. This trend reflects the increased interest that spot Bitcoin ETFs generate, pushing established financial institutions to look into Ethereum ETFs with renewed vig.

VanEck’s Ethereum ETF Application amidst SEC’s Scrutiny

A concurrent development includes the Ethereum ETF application from BlackRock, an investment colossus at the global level. Nevertheless, the SEC also adhered to a very careful stance, extending the examination period not only for BlackRock’s iShares Ethereum Trust but also for a prominent player in the industry, i.e., Grayscale Investments, Fidelity, and VanEck. 

The fact that BlackRock’s application decision has been delayed until March 10, 2024, by the regulator highlights the thoroughness of the inspection process as the Ethereum network prepares to switch to the proof of stake model. Also, the fears of market manipulation continue to linger.

Regulatory obstacles notwithstanding, investor sentiment remains very high. Experts view the odds of a spot Ethereum ETF approval by May as 60%. This confidence comes from a deadline that falls within only 240 days. It also comes on May 23, which marks the end of the review process for the proposals submitted by Ark/21Shares and VanEck.

However, there is an element of mystery as well in the SEC’s deliberations with Hester Peirce, the commissioner, who is a known advocate of a more lenient policy for Ethereum ETFs. The SEC’s remarks could be traced back to their experience with the spot Bitcoin ETFs as they seem to learn as they go, indicating a potential shift in stance after an increase in the application submissions.