21Shares is set to delist its Terra exchange-traded product (ETP) and pull the plug on five other cryptocurrency ETPs, citing a lack of investor interest.
The move comes as the firm looks to streamline its offerings and focus on more promising opportunities in the ever-evolving digital asset space.
Bloomberg reports that the affected ETPs will begin closing next month, despite only being open for less than a year.
21Shares ETPs Suffer Blow As Investors Dwindle
The cumulative assets under control of the six ETP closures are less than $700,000.
The 21Shares USD Yield ETP (USDY), 21Shares Crypto Layer 1 ETP (LAY1), 21Shares S&P Risk Controlled Bitcoin Index ETP (SPBTC), 21Shares DeFi 10 Infrastructure ETP (DEFII), and 21Shares S&P Risk Controlled Ethereum Index ETP (SPETH) are among the products that will be phased out after the April 6 trading day.
The sixth product, 21Shares Terra Classic ETP (LUNA), will remain on the market until June 12.
After delisting, the termination process begins. The ETP’s assets are sold and the proceeds are distributed to investors on a pro-rata basis, based on their holdings in the ETP. The timing and process of termination can vary depending on the specifics of the ETP and its underlying assets.
ETPs In A Nutshell
An exchange-traded product (ETP) is a type of investment that can be bought and sold on an exchange, just like people would with a stock. ETPs can track a variety of different assets such as stocks, bonds, commodities or currencies.
When buying an ETP, the buyer essentially is acquiring a share of a portfolio of assets, which is managed by a financial institution.
There are different types of ETPs, but one common type is an exchange-traded fund (ETF). ETFs are designed to track the performance of an index, such as the S&P 500.
When buying an ETF, a person is buying a piece of a fund that holds all the stocks in the index in the same proportions as the index. So, if the index goes up, the value of the person’s ETF shares will go up too.
The Terra exchange-traded fund (ETF) is a type of ETF that invests in companies that are focused on the development and use of blockchain technology for decentralized finance (DeFi) applications. The fund is named after the Terra stablecoin, which is designed to maintain a stable value against a target asset, such as the US dollar.
A Series Of Collapses
Terra’s implosion, followed by that of Sam Bankman-Fried’s FTX crypto exchange, made a trying year for digital assets.
After the market meltdown, 21Shares, VanEck, and Valour all froze new purchases and redemptions of their Terra ETPs.
Due to poor demand, ETC Group closed four ETPs, including the ETC Group Physical Uniswap ETP (USWA).
The ETP market is experiencing low sentiment as investors continue to grapple with market uncertainty and volatility.
ETPs, which track a range of underlying assets such as stocks, bonds, and commodities, have seen a decline in demand due to market conditions and economic uncertainty.
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However, despite the current low sentiment, ETPs continue to be a popular investment vehicle for many investors due to their liquidity and diversification benefits. It remains to be seen how the market will respond in the coming months and whether investor sentiment towards ETPs will rebound.
As a result, some companies have made the decision to delist or terminate certain ETP offerings due to lack of investor interest or market conditions. This has led to a decrease in the overall number of ETPs available to investors.
-Featured image from Coinspeaker