Crypto Asset Manager 21Shares is liquidating two Bitcoin and the Ethereum Futures Exchange-Traded Funds, according to a recent press release. The move comes amid a slump in the crypto market developed due to concerns about the potential economic recession.
The ARK 21Shares Active Bitcoin Ethereum Strategy ETF (Arky) and the Ark 21Shares Active On-Chain Bitcoin Strategy ETF (ARKC) will be settled “on or around March 28th.” Investors are able to trade their holdings with two funds until the end of the trading day on March 27th.
According to a press release from 21Shares, the scheduled liquidation is “based on regular reviews of the company’s product lineup, and is consistent with market dynamics, client needs and mature digital assets.”
While Arky is seeking capital gains through its portfolio of Bitcoin and ether futures contracts, ARKC is seeking capital growth by investing in the ARK 21Shares Active Bitcoin Futures Strategy ETF (ARKA), Bitcoin Futures Contracts and cash equivalents. Both funds are actively managed, with an expense ratio of 1% and 0.93%, respectively.
Investors who continue to hold Arky and ARKC shares on the day of liquidation will receive a distribution payment equal to the fund’s net asset value and may become a taxable event. In the press release, the issuer advised investors to consult their tax advisor about potential tax liabilities resulting from receipt of liquidation revenue.
21Shares and Ark Invest did not immediately respond to ETF.com’s request for comment.
Bitcoin and Ethereum ETFs are suffering late as investors worry about the possibility of a trade war and a recession that could turn into low-risk investments such as bond funds. Ishares Bitcoin Trust (IBIT), the world’s largest Crypto ETF, is down 9.3% per year, while Bitcoin prices fall by around 10% per year, while ether is down 42%.
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