Hashdex to Liquidate DEFI Bitcoin ETF After Assets Fell to About $14.7 Million

Trading ends on Aug. 17

Hashdex said the Hashdex Bitcoin ETF will cease trading after the close on Aug. 17, after which the firm plans to liquidate the portfolio and delist the shares from NYSE Arca. The fund will also stop accepting creation orders from authorized participants after that date.

Until the final trading session, investors can still buy or sell DEFI shares through their brokers. As the closure nears, however, market prices may not closely track the fund’s net asset value. On July 31, DEFI’s website listed a net asset value of $71.32 per share and a closing price of $71.15.

Under its normal strategy, the ETF invests at least 95% of assets in spot Bitcoin, with the remaining portion available for cash, cash equivalents and CME-listed Bitcoin futures.

What remaining shareholders will receive

Investors who continue to hold DEFI after trading stops will not receive Bitcoin in kind. Instead, the fund will sell its holdings and distribute the remaining proceeds in cash once liabilities and liquidation expenses have been deducted.

Hashdex said that cash payment is expected around Aug. 28. The final amount may differ from the fund’s pre-delisting net asset value because Bitcoin’s price can change while the portfolio is being unwound.

The company also noted that the liquidation may have tax consequences for US investors. Whether the payment is treated as a taxable disposal can depend on factors including the shareholder’s cost basis, account type and individual circumstances.

Competition in the spot Bitcoin ETF market

DEFI entered the US spot Bitcoin ETF segment by converting an existing futures-based product. It began holding spot Bitcoin in March 2024, more than two months after the SEC approved the first batch of spot Bitcoin ETFs in January.

That later launch left the fund competing against products that had already gathered larger asset pools and stronger trading volume. According to the source article, DEFI’s relatively small size made it more difficult to compete on liquidity even with a 0.25% expense ratio.

Hashdex remains active in US crypto ETFs

The closure applies only to DEFI and does not amount to a broader exit from the US crypto ETF market by Hashdex. The firm’s separate Hashdex Nasdaq CME Crypto Index ETF, which trades under the ticker NCIQ, remains active.

NCIQ held about $206.82 million in net assets as of July 31. The fund offers market-cap-weighted exposure to Bitcoin, Ethereum, XRP, Solana, Cardano, Chainlink, Stellar and Bitcoin Cash. As of July 27, Bitcoin represented 78% of the portfolio and Ethereum 12.2%.

Hashdex cut NCIQ’s annual management fee from 0.50% to 0.25% in March. The product was also renamed in January from the Hashdex Nasdaq Crypto Index US ETF, while keeping the same ticker.

Key dates and next steps

For DEFI shareholders, Aug. 17 is the final day to sell shares on NYSE Arca and the deadline after which no new creation orders will be accepted. Hashdex will then liquidate the portfolio before making the expected cash distribution around Aug. 28.

Investors who sell before the final trading day will receive the prevailing market price rather than the later liquidation amount. Those who continue holding through the wind-down should expect the position to disappear from brokerage accounts once the cash payment is completed.

Hashdex has said the final payout will depend in part on Bitcoin’s price during the liquidation period, leaving the exact amount uncertain until the process is finished.