A very important and big news has come out for the users of the Cryptocurrency Market, according to which the major Crypto ETF Suppliers 21Shares announced the closure of two of its major Crypto ETF funds. These funds were Ark 21Shares Energetic Bitcoin Ethereum Technique ETF (Arky) and Ark 21Shares Energetic on-Chain Bitcoin Technique ETF (ArkC). This decision has created a stir in Crypto investors and financial community. Let us know what can be the reasons behind this decision and what will be the impact on investors.
Why did 21Shares take this decision?
21Shares decided to shut down Arky and Arkc after a regular product review and market assessment. According to reports, the reasons for this decision may include the following points:
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Performance: The performance of these ETFs may not have been in accordance with expectations and they could not perform well compared to other competitive products.
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Investor demand: Due to low investor interest and low trading volume, these ETFs could have been unprofitable.
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Market condition, Cryptocurrency Market instability and developing conditions may have affected this decision.
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Simplicity of product: 21Shares may have decided to close these funds to make their product list simple and strategic.
Keeping this in mind, ETF Liquidation is a normal financial process that is according to market needs and investor demand.
A look at Arky and Arkcc
Information about two ETFs closed by 21Shares:
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Ark 21Shares Energetic Bitcoin Ethereum Technique ETF (Arky): The purpose of this ETF was to invest in both major cryptocurrency bitcoin and ethereum. It was based on an active investment strategy, which changed the allocation between these two cryptocurrency according to market conditions.
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Ark 21Shares Energetic on-Chain Bitcoin Technique ETF (Arkc): The focus of this ETF was only on Bitcoin and in investment decisions were taken using “on-chain” data and analysis. Its purpose was to raise profit from activity inside Bitcoin Community. What is bitcoinIf you want to know, you can read the article related to it by clicking on the link.
Although both these ETFs were named with the ARK brand, it is important to note that they were managed by 21Shares, and ARK Make Investments were partnership, but there was no direct control over the management or operation of Ark Make Make Investments.
What steps should investors take?
It is important for shareholders investing in Arky and ArKC to note the following dates:
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March 27: This is the date when investors will have to sell their holdings, before the liquidation process begins. Before this date, selling shares will give more control to investors and they will be able to rehear their investment.
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March 28: The liquidation process will start from this date, in which the sale of assets under 21Shares ETF will be done and the remaining shareholders will be distributed cash.
Investors should understand that during liquidation, share holders get cash on the basis of net asset value (NAV), but may also cost some expenses for it.
Conclusion
The decision to shut down Arky and Arkc ETF of 21Shares is part of the development of Crypto ETF Marketplace. This decision forced investors to understand once again that Crypto ETF space is still in its early stages and such adjustment process is common. The partnership of 21Shares with Ark Make Investments will continue and there may be possibilities for other products in future. It is important for investors to re-evaluate their portfolio and ensure that their investment is in line with their longitarms.
