Cryptocurrency asset manager 21Shares has made the decision to liquidate two actively managed exchange-traded funds (ETFs) linked to bitcoin and ether futures in response to the current market downturn. The funds in question are the ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC) and the ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY). Investors will have until the market closes on March 27 to trade shares, with liquidation expected to occur “on or around March 28,” as stated in a press release.
These actively managed ETFs, which feature expense ratios of 1% and 0.93%, are being liquidated as U.S.-listed spot bitcoin ETFs have seen over $1.66 billion in outflows this month. The outflows coincide with a significant drop in cryptocurrency prices, with bitcoin down more than 12.8% year-to-date and the CoinDesk 20 Index (CD20) losing approximately 24% of its value over the same period.
The decision to liquidate these ETFs comes as a response to the challenging market conditions brought on by the recent downturn in cryptocurrency prices. Despite the popularity of these funds among investors, the current economic climate has necessitated this strategic move by 21Shares to ensure the best possible outcome for shareholders.
As the cryptocurrency market continues to experience volatility, it is essential for asset managers like 21Shares to adapt and make necessary adjustments to their investment strategies. By liquidating these ETFs, the company is taking proactive steps to mitigate potential losses and navigate the turbulent market landscape.
Investors who are currently holding shares in the ARK 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC) and the ARK 21Shares Active Bitcoin Ethereum Strategy ETF (ARKY) should closely monitor the situation and consider their options before the liquidation process commences. It is important for investors to stay informed and seek guidance from financial advisors to make informed decisions during these uncertain times.