21Shares is pulling the plug on two of its cryptocurrency ETFs after dismal performance. The company announced it will liquidate the ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY) and the ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC), both of which trade on the Cboe BZX exchange. Talk about a crypto nightmare.
The ETFs, which focused on Bitcoin and Ethereum futures contracts through actively managed strategies, haven’t exactly been winners. ARKY is down a painful 25.15% year-to-date, while ARKC has dropped 16.05%. Ouch. The decision to shut them down reportedly came after a “routine review” of the product lineup, but let’s be real—nobody liquidates successful funds.
Shareholders have until March 27, 2025, to sell their holdings, with the final liquidation set for around March 28. Anyone still holding shares after trading closes on the last day will receive a liquidating distribution based on their proportionate ownership. Better mark those calendars.
This move comes amid a broader cryptocurrency market downturn. Bitcoin has tumbled 12.8% year-to-date, while the CoinDesk 20 Index has tanked by 24%. The company indicated the funds “no longer align with 21Shares’ current strategy” given the evolving market conditions. The firm has also been adjusting its other offerings by reducing fees to 0.49% for its Bitcoin Ethereum Core ETPs. A staggering $1.66 billion has flowed out of U.S.-listed spot Bitcoin ETFs. Not exactly a bullish sign.
The partnership between 21Shares and ARK Investment Management remains intact, with both firms claiming they’re still committed to advancing regulated cryptocurrency products in the U.S. market. The market cap of major cryptocurrencies continues to fluctuate dramatically as market sentiment significantly impacts valuations across the industry.
21Shares, part of the larger 21.co organization, continues to position itself as a global leader in decentralized finance—despite this setback.
The liquidations signal trouble for actively managed crypto ETFs and might push other issuers to reconsider their offerings. It’s a stark reminder of the risks tied to cryptocurrency futures investments. The crypto world keeps promising revolution, but for now, investors in these particular funds are just getting revolting returns.
