Ella Mitchell 
21Shares to Liquidate Bitcoin and Ethereum ETFs Amid Market Shifts
21Shares Announces Liquidation of Bitcoin and Ethereum ETFs Amid Market Adjustments
21Shares has officially announced its decision to liquidate two of its cryptocurrency exchange-traded funds (ETFs). The affected funds are:
- ARK 21Shares Active Bitcoin Ethereum Strategy ETF
- ARK 21Shares Active On-Chain Bitcoin Strategy ETF
The liquidation process is set for March 28, 2025, with March 27 being the last trading day for these ETFs. This move underscores shifting market trends and the evolving nature of crypto investments.
ETFs Face Liquidation as Crypto Market Adjusts
21Shares has explained that its decision to liquidate Bitcoin and Ethereum ETFs follows a periodic assessment of fund performance. The company aims to align its investment offerings with market conditions, investor demand, and overall financial trends.
Key Factors Behind the Liquidation:
- Declining investor inflows into these ETFs.
- Increasing market competition from other cryptocurrency investment products.
- The emergence of spot Bitcoin ETFs, making alternative crypto ETFs less attractive to investors.
Investors in these ETFs are advised to sell their shares before the final trading date. After March 28, all remaining assets in these funds will be liquidated, and shareholders will receive final distributions based on their holdings.
Shifting ETF Landscape in the Crypto Market
Despite the decision to liquidate Bitcoin and Ethereum ETFs, the broader cryptocurrency ETF market remains highly active. 21Shares is adjusting its investment strategy, recently reducing fees for its Bitcoin Ethereum Core ETPs to 0.49% in an effort to attract more investors.
Meanwhile, other major financial firms are entering the crypto ETF space:
- Bitwise introduced the OWNB ETF, which focuses on companies that hold Bitcoin on their balance sheets.
- Rex Shares launched a Bitcoin Corporate Bond Convertible ETF, catering to institutional investors.
- Several issuers have applied for ETFs linked to XRP, HBAR, DOGE, and AVAX, signaling expanding market interest in altcoin-based ETFs.
- The Chicago Board Options Exchange (CBOE) has filed an application to allow staking for Fidelity’s Ethereum ETF, reflecting the growing demand for yield-generating crypto investments.
Competition and Market Demand Drive ETF Changes
The crypto ETF industry has experienced rapid changes, with asset managers and issuers responding to regulatory developments, investor preferences, and competitive pressure. The introduction of spot Bitcoin ETFs has significantly reshaped the market, making it challenging for other crypto-based ETFs to maintain strong capital inflows.
Why Firms Are Liquidating Bitcoin and Ethereum ETFs:
- Spot Bitcoin ETFs have diverted investor interest, reducing demand for alternative crypto ETFs.
- Regulatory shifts are influencing ETF structures, prompting issuers to focus on more compliant products.
- Market volatility continues to drive investor sentiment, making fund sustainability more difficult.
- Institutional investors prefer diversified exposure, leading to increased interest in multi-asset crypto ETFs.
21Shares’ Strategy Moving Forward
Although 21Shares has decided to liquidate Bitcoin and Ethereum ETFs, the company remains committed to expanding its crypto investment products. Key strategic moves include:
- Reducing ETF management fees to remain competitive.
- Exploring new investment vehicles, such as staking-based ETFs.
- Focusing on long-term demand trends, including institutional adoption of digital assets.
The Future of Crypto ETFs in a Rapidly Changing Market
The decision by 21Shares to liquidate Bitcoin and Ethereum ETFs signals a broader market transition, where investors are shifting toward more sophisticated, lower-cost, and institutional-grade products. As new ETF applications continue to be filed, the competition among crypto asset managers is expected to intensify.
With the rise of staking ETFs, multi-asset funds, and Bitcoin-backed corporate investment products, the crypto ETF market is far from slowing down. Instead, it is evolving into a more competitive and investor-driven landscape.
