VanEck decides to shut down the “Bitcoin Strategy ETF” product

On Jan 18, 2024

Closed sign in a shop showroom with reflections - red sign over desaturated background

Just after 7 days of Bitcoin spot ETF approval, VanEck decided to liquidate its Bitcoin futures ETF product.

As we know a week ago, the United States Securities and Exchange Commission (SEC) green-signalled 11 Bitcoin spot ETF products, including the VanEck Bitcoin spot ETF application.

Following the approval of the Bitcoin spot ETF product, VanEck decided to terminate its Bitcoin futures ETF product. The decision was taken by the VanEck team on behalf of multiple factors e.g. performance, liquidity, assets under management, and investor interest, among others.

Now that our spot bitcoin ETF has been approved, we are closing our ETF that invested in bitcoin futures. https://t.co/pgf8NaKb4a
— VanEck (@vaneck_us) January 17, 2024

This is really good news for VanEck Bitcoin spot ETF product because spot ETF product remains better over futures ETF and it will help VanEck team to focus on its Bitcoin spot ETF product service enhancement more perfectly.

Because of multiple Bitcoin spot products in the US, the trading volume in the Bitcoin market increased rapidly. In just three days of Bitcoin spot ETF products trading, the volume hit $10 billion (only in spot ETF products).

Bloomberg analyst James Seyffart said that the total trading volume of U.S. Bitcoin spot ETFs within three days was close to $10 billion, of which Grayscale GBTC's three-day trading volume reached $5.174 billion, BlackRock's IBIT $1.997 billion, and FBTC $1.479 billion, with a… pic.twitter.com/CeKTcCpdcQ
— Wu Blockchain (@WuBlockchain) January 17, 2024

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All these trading activities show that a net inflow of money in the Bitcoin market is taking place. Notably the majority of the fund managers (Bitcoin spot ETF issuers) are buying Bitcoin in bulk amounts with their some fraction of reserves as well as revenue from spot ETF products trading, to provide better customer service.

Bitcoin ETPs globally currently hold 864,719 BTC.

That's equal to 4.4% of BTC's circulating supply and roughly 45% of the size of crypto exchange reserves.

ETFs are a huge part of Bitcoin's market structure, impacting both spot markets and the CME – and its relevancy is due to… pic.twitter.com/OtLSQN6aN6
— Vetle Lunde (@VetleLunde) January 17, 2024

Bitcoin price action

The current trade price of Bitcoin is $42,632 & this trade price is 8.21% down over the last 7 days of trade price.

VanEck decides to shut down the “Bitcoin Strategy ETF” product 1

The dump in the trade price of Bitcoin is good news because, after 3 months, the Bitcoin network will go through a halving event, so a high dump in trade price will be a type of opportunity to accumulate some fraction of Bitcoin at a decent discounted price.