Crypto asset manager 21Shares is liquidating two bitcoin and ethereum futures exchange-traded funds, according to a recent press release. The move comes amid a crypto market slump that’s developed due to concerns of a possible economic recession.
The ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY) and the ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC) will liquidate “on or around March 28.” Investors can trade their holdings in the two funds until the end of the trading day on March 27.
The scheduled liquidation is taking place “based on routine review of the firm’s product lineup to ensure it aligns with market dynamics, the needs of its clients and a maturing digital assets landscape,” according to the press release from 21Shares.
ARKY seeks capital appreciation through a portfolio of bitcoin and ether futures contracts, while ARKC seeks capital growth by investing in the ARK 21Shares Active Bitcoin Futures Strategy ETF (ARKA), bitcoin futures contracts and cash equivalents. Both funds are actively managed, and they have expense ratios of 1% and 0.93%, respectively.
Investors who continue to hold shares in ARKY and ARKC on the liquidation date will receive distribution payouts equal to their proportion of the fund’s net asset value, which may result in a taxable event. In the press release, the issuer advised investors to consult their tax advisors about the potential tax liability resulting from the receipt of liquidation proceeds.
21Shares and ARK Invest did not immediately respond to etf.com’s request for comment.
Bitcoin and ethereum ETFs have suffered of late as investors worried about trade wars and the possibility of a recession turn to lower-risk investments, such as bond funds. The world’s largest crypto ETF, the iShares Bitcoin Trust (IBIT), is down 9.3% year to date, while bitcoin’s price is down roughly 10% for the year and ether is off 42%.
