21Shares Halts Several Crypto Products Citing Decreased Interest (Report)

The Switzerland-based crypto ETP issuer – 21Shares – will reportedly terminate five of its funds and delist another one due to low interest from investors. 

Arielle Pennington – Head of Global Communications – claimed the firm will keep offering its other products that enjoy a solid level of demand.

Scraping Some ETPs

As revealed by Bloomberg, the company will close down the following five funds: the 21Shares S&P Risk Controlled Ethereum Index ETP (ticker SPETH), the 21Shares S&P Risk Controlled Bitcoin Index ETP (ticker SPBTC), the 21Shares DeFi 10 Infrastructure ETP (DEFII), the 21Shares USD Yield ETP (USDY), and the 21Shares Crypto Layer 1 ETP (LAY1).

Traders will no longer have access from April 6. It will also delist the 21Shares Terra Classic ETP (LUNA) on June 12. 

The main reason behind the move is the low interest, as they have total assets of less than $700,000.

Pennington outlined that the demand for the other ETPs remains strong, adding that January saw a significant amount of inflows. During that month, assets under management for the 21Shares Bitcoin ETP (ABTC) and the 21Shares Ethereum ETP (AETH) surpassed $200 million.

The Fed’s policy of lifting interest rates has negatively affected some products, such as ETPs, and could be one reason behind the slide of the cryptocurrency market last year. Other factors include the countless scandals and collapses in the industry, with FTX, Terra, and Celsius among the infamous examples. 

However, the market condition has improved a lot since the start of the year. Bitcoin and many altcoins surged to multi-month peaks amid the banking cataclysm in the US. 

In addition, the industry could further benefit if the Fed puts an end to its aggressive rate hikes and thus give a breath of fresh air to risk-off assets. The initial expectations are that the central bank will increase interest rates by 25 basis points next week, while some believe they might not touch the percentage after lifting it for eight consecutive months. 

The BTC ETF Was Rejected Again

Apart from offering ETPs, 21Shares displayed its plans to introduce a spot Bitcoin ETF on the Cboe BZX Exchange in a joint effort with Ark Investment Management. Nonetheless, the US SEC rejected the application nearly two months ago, as it did in the spring of 2022.

It maintained that the Cboe BZX Exchange did not “demonstrate that its proposal is consistent with the requirements” to prevent price manipulation and scams.

The SEC has previously dismissed similar efforts launched by VanEck, NYDIG, Grayscale, and other organizations.