Introduction to the Liquidation
Crypto asset management firm 21Shares has announced plans to liquidate two of its actively managed exchange-traded funds (ETFs) that focus on bitcoin and ether futures. This decision comes in response to a broader downturn in the cryptocurrency market, which has seen significant price declines recently.
Funds Affected by Liquidation
The ETFs set for liquidation include:
– **ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC)**
– **ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY)**
Investors will have the opportunity to trade shares of these funds until the market closes on March 27. The actual liquidation of the funds is anticipated to take place “on or around March 28,” as confirmed in a recent press release from the company.
Market Context and Performance
The decision to liquidate these ETFs comes on the heels of a challenging market environment. U.S.-listed spot bitcoin ETFs have experienced outflows exceeding $1.66 billion this month, indicative of investor concerns as cryptocurrency prices continue to fall. Notably, bitcoin has seen a decline of more than 12.8% year-to-date, while the broader CoinDesk 20 Index (CD20) has lost approximately 24% of its value during the same timeframe.
Impact on Shareholders
For shareholders who retain their investments until the liquidation date, the payouts will be equivalent to their share of the fund’s net asset value. This ensures that investors will receive compensation reflective of their holdings in the funds at the time of liquidation.
As the cryptocurrency market continues to face various challenges, including price volatility and investor uncertainty, the liquidation of these ETFs highlights the ongoing shifts and adjustments within the industry.
