Crypto exchange-traded products issuer 21Shares is closing down five funds and delisting another, a company spokesperson confirmed. The shutdowns come as investor demand cools.
Since the Federal Reserve and other central banks have started raising interest rates to fight inflation, the crypto space has struggled. Digital tokens, just like other riskier assets, have sold off in a risk-off environment. On top of that, the industry has been plagued by a number of crypto-specific scandals, including the implosion of once-esteemed companies like exchange FTX.
All of it has pushed investors away, including many retail traders. Although Bitcoin is staging a big rally this year, currently trading slightly below $25,000, the world’s largest digital asset by market value is still far from its high of nearly $69,000 at the end of 2021.
Zug, Switzerland-based 21Shares is shuttering five products: the 21Shares S&P Risk Controlled Bitcoin Index ETP (ticker SPBTC), the 21Shares S&P Risk Controlled Ethereum Index ETP (SPETH), the 21Shares DeFi 10 Infrastructure ETP (DEFII), the 21Shares Crypto Layer 1 ETP (LAY1) and the 21Shares USD Yield ETP (USDY). The last trading day for the ETPs is April 6. The company is also delisting the 21Shares Terra Classic ETP (LUNA), effective June 12. The six funds have total assets of less than $700,000.
Website ETF Stream reported the 21Shares shutdowns earlier Thursday.
Even before the implosion of FTX, the previous boom in virtual-currency exchange-traded products had been deflating. Launches worldwide had started to dwindle in recent months, and there’s been an uptick in liquidations. Some analysts said they expect more closures in 2023.
Hany Rashwan co-founded 21Shares with Ophelia Snyder in 2018. The company launched its first physically-backed crypto ETP during that year’s crypto slump and Rashwan has in the past said that downturns can be good times to consolidate, build and innovate. Its first fund, 21Shares Crypto Basket Index ETP (HODL), which will continue trading, has assets of about $100 million, according to data compiled by Bloomberg.
--With assistance from Sam Potter.
This article was provided by Bloomberg News.