21Shares is set to remove 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 company looks to streamline its offerings and focus on more promising opportunities in the growing digital asset space.
reports Bloomberg that the affected ETPs will close next month, even though they have only been open for less than a year.
21Shares ETPs Explode As Investors Decline
The cumulative assets under control of the six ETP closings are less than $700,000.
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 in among the products that will be removed after the trading day of April 6.
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 may vary depending on the specifics of the ETP and its underlying assets.
ETPs In A Nutshell
Exchange-traded products (ETPs) are a type of investment that can be bought and sold on the stock exchange, just like people own stocks. ETPs can track a variety of different assets such as stocks, bonds, commodities or currencies.
When buying an ETP, the buyer actually gets a share of the asset portfolio, which is managed by a financial institution.
There are many different types of ETPs, but one common type is exchange-traded funds (ETFs). ETFs are designed to track the performance of an index, such as the S&P 500.
When buying an ETF, a person buys a piece of a fund that holds all the stocks in an index in the same proportion as the index. So, if the index goes up, the value of that person’s ETF shares will also go up.
Terra exchange-traded fund (ETF) is a type of ETF that invests in companies that focus 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.
Collapse Series
The implosion of Terra, followed by Sam Bankman-Fried’s FTX crypto exchange, made for a trying year for digital assets.
After the market crisis, 21Shares, VanEck, and Valor all froze the purchase and redemption of new Terra ETPs.
Due to low demand, ETC Group closed four ETPs, including ETC Group Physical Uniswap ETP (USWA).
The ETP market is experiencing low sentiment as investors continue to struggle with uncertainty and market volatility.
ETPs, which track a number of underlying assets such as stocks, bonds, and commodities, have seen reduced demand due to market conditions and economic uncertainty.
Crypto market cap reclaims the $1 trillion level after a shaky week. Chart: TradingView.com.
However, despite the current lackluster 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 remove or discontinue certain ETP offerings due to lack of investor interest or market conditions. This has led to a reduction in the number of ETPs available to investors.
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