Hashdex will shut down its US-listed spot Bitcoin ETF DEFI after failing to build enough assets and trading volume to stay viable, the firm told the Wall Street Journal. What’s happening - DEFI (NYSE Arca) will stop trading after the market close on Aug. 17. Hashdex will then begin liquidating the fund’s Bitcoin holdings and delist the shares. - Creation orders from authorized participants will be halted after Aug. 17. Investors can still buy and sell DEFI through brokers until the final trading session, but bid/ask spreads and price deviations from NAV may widen as the closure nears. - Hashdex expects to distribute the liquidation proceeds in cash around Aug. 28. Shareholders who hold through liquidation will receive cash, not Bitcoin; the final payout will depend on Bitcoin’s price during the unwind and will be net of liabilities and liquidation costs. Key facts - DEFI managed about $14.7 million in assets as of July 30, making it one of the smaller US spot-Bitcoin ETFs. - As of July 31, DEFI’s NAV was $71.32 per share and the closing market price was $71.15. - The fund typically held at least 95% of its assets in spot Bitcoin, with the remainder in cash, cash equivalents and CME-listed Bitcoin futures. - DEFI converted from an existing futures-based product and only began holding spot Bitcoin in March 2024—after the first wave of spot ETFs launched in January—which left it behind larger rivals in asset gathering and liquidity. - DEFI charged a 0.25% expense ratio. Investor implications - Selling before Aug. 17: You’ll receive the prevailing market price at sale time, which may differ from the eventual liquidation value. - Holding through liquidation: You’ll get a cash payout (expected around Aug. 28) that could be higher or lower than DEFI’s pre-closure NAV, depending on Bitcoin moves while the portfolio is unwound. - Tax consequences: The cash distribution may be treated as a taxable disposition for US investors; tax treatment will vary by account type, cost basis and individual circumstances. What this means for Hashdex’s US ETF business - Hashdex is not exiting the US crypto ETF market. Its Hashdex Nasdaq CME Crypto Index ETF (ticker NCIQ) remained active with about $206.82 million in net assets as of July 31. - NCIQ provides market-cap-weighted exposure to a basket of crypto assets (Bitcoin was roughly 78% of the portfolio and Ethereum about 12.2% as of late July). Hashdex cut NCIQ’s management fee from 0.50% to 0.25% in March and rebranded the fund in January (ticker unchanged). Bottom line DEFI’s closure highlights the challenge smaller spot-Bitcoin ETFs face competing on liquidity and flows against larger incumbents. DEFI holders should decide whether to sell before Aug. 17 to realize market prices or hold through liquidation and accept a cash distribution—and potential tax consequences—around Aug. 28.
Hashdex to Close DEFI Spot-Bitcoin ETF After Failing to Attract Assets
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Summary
Hashdex will delist its US-listed DEFI spot-Bitcoin ETF after struggling to attract ETF inflows. DEFI will stop trading on August 17, with liquidation proceeds expected by August 28. The fund held $14.7 million in assets as of July 30, with a NAV of $71.32 per share. Hashdex’s NCIQ ETF, which tracks a crypto index, holds $206.82 million. Altcoins to watch may gain attention as investors shift focus from underperforming products.
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