Crypto asset manager 21Shares is pulling the plug on two of its cryptocurrency ETFs. The company announced plans to liquidate both the ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY) and the ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC).
Another one bites the dust in crypto land. The funds, which trade on the Cboe BZX exchange, will cease operations by March 2025. Shareholders can dump their holdings until March 27, 2025, after which they’ll receive whatever’s left when the liquidation wraps up on March 28. Better mark those calendars.
21Shares claims this is just a “routine product review” to align with market dynamics and client needs. Right. Because nothing says “everything’s fine” like shutting down your investment products. The firm insists it remains committed to regulated crypto products in the U.S. market, despite this obvious retreat.
Both ETFs focused on Bitcoin and Ethereum futures through actively managed strategies. Their demise comes amid wild cryptocurrency market volatility and increased competition from spot Bitcoin ETFs that have flooded the market. Unlike spot ETFs, futures-based funds often struggle to perfectly match underlying cryptocurrency price movements. Turns out, investors have options now.
Shareholders should brace for impact. The liquidation will trigger a taxable event, potentially resulting in capital gains or losses. Time to call those tax advisors. Customary brokerage charges may apply to transactions, because of course they will.
The broader context isn’t pretty. Bitcoin price swings have rattled investor confidence, and regulatory scrutiny continues to intensify across crypto markets. It’s getting harder to sell the “crypto is the future” narrative when products keep disappearing.
Despite the setback, 21Shares and partner ARK Invest claim they’re still all-in on cryptocurrency investments. The decision follows significant outflows from the funds as investors redirected their capital elsewhere. They talk about “advancing regulated cryptocurrency products” and “bridging traditional and decentralized finance.”
Big words for companies that just folded two ETFs. The crypto landscape keeps evolving. Some would say devolving. Either way, 21Shares is cutting its losses and moving on. Adaptation is the name of the game in this increasingly chaotic market.
