The Swiss-based crypto ETP issuer – 21Shares – has reportedly terminated five of its funds and will cut another due to low investor interest.
Arielle Pennington, head of global communications, said the company will continue to offer its other products which are benefiting from a solid level of demand.
Scratch some ETPs
As revealed per Bloomberg, the company will close the following five funds: 21Shares S&P Risk Controlled Ethereum Index ETP (SPETH ticker), 21Shares S&P Risk Controlled Bitcoin Index ETP (SPBTC ticker), 21Shares DeFi 10 Infrastructure ETP (DEFII), 21Shares USD Yield ETP (USDY) and 21Shares Crypto Layer 1 ETP (LAY1).
Traders will no longer have access from April 6th. It will also remove the 21Shares Terra Classic ETP (LUNA) on June 12.
The main reason for this move is the low interest rate as their total assets are less than $700,000.
Pennington pointed out that demand for other ETPs remains strong, adding that January saw a significant amount of inflows. During this month, the assets under management of the 21Shares Bitcoin ETP (ABTC) and the 21Shares Ethereum ETP (AETH) exceeded $200 million.
The Fed’s interest rate hike policy has had a negative impact on certain products, such as ETPs, and could be one of the reasons for the fall in the cryptocurrency market last year. Other factors include the countless scandals and meltdowns in the industry, with FTX, Earthand Celsius among the infamous examples.
However, the market situation has improved a lot since the beginning of the year. Bitcoin and many altcoins hit multi-month highs amid the US banking cataclysm.
Moreover, the industry could benefit more if the Fed ends its aggressive rate hikes and thus gives a breath of fresh air to risk-free assets. Initial expectations are that the central bank will raise interest rates by 25 basis points next week, while some believe they may not touch the percentage after lifting for eight consecutive months.
BTC ETF Rejected Again
In addition to offering ETPs, 21Shares has posted plans to introduce a spot Bitcoin ETF on the Cboe BZX Exchange in a joint effort with Ark Investment Management. However, the US SEC rejected the application almost two months ago, as in the spring of 2022.
He argued that the Cboe BZX Exchange had not “demonstrated that its proposal met the requirements” to prevent price manipulation and scams.
The SEC has previously rejected similar efforts launched by VanEckNYDIG, Shades of greyand other organizations.
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