Hashdex plans to close and liquidate its U.S. spot Bitcoin exchange-traded fund, DEFI, after the product grew to about $14.7 million in assets under management. The move was disclosed in a filing with the U.S. Securities and Exchange Commission on Monday.
Trading in the fund is set to end after the market closes on Aug. 17, after which the ETF will be delisted. Shareholders still holding the fund at that time are expected to receive cash distributions on or about Aug. 28, once the remaining Bitcoin in the portfolio has been sold.
Wind-down process set out in SEC filing
Hashdex said the fund will sell its remaining Bitcoin holdings after the last day of trading. During the liquidation process, the ETF will stop pursuing its stated investment objective and will limit its activities to winding up operations, preserving asset value, paying liabilities, and distributing remaining assets to shareholders.
Because the final distribution depends on the sale of the fund's Bitcoin, the amount investors receive may differ from the ETF's current value. That is due to potential changes in Bitcoin's price while the assets are being sold.
Firm cites scale, liquidity and product fit
In explaining the decision, Hashdex said it considered several factors, including assets under management, trading liquidity, operating costs, investor interest, and the role of the fund within the company's broader product lineup.
The manager added that it still oversees more than $200 million across investment products available to U.S. investors, even as it exits this specific ETF.
A small fund in a crowded U.S. market
The closure comes more than two years into intense competition in the U.S. spot Bitcoin ETF market. Hashdex entered that segment after the SEC approved the first U.S. spot Bitcoin ETFs in January 2024, a decision that opened the door for a broader range of listed Bitcoin products.
An ETF allows investors to gain exposure to Bitcoin through shares that trade on an exchange rather than by holding the cryptocurrency directly. In DEFI's case, the fund's modest asset base left it far smaller than the leading products competing for investor flows and market attention.
How DEFI evolved and what comes next
Hashdex's U.S. Bitcoin product had earlier operated as a Bitcoin futures ETF under the DEFI ticker starting in September 2022. The firm later converted that fund into a spot Bitcoin ETF in March 2024.
Hashdex also moved to broaden its U.S. offering with a proposed combined Bitcoin and Ethereum ETF, though the SEC delayed a decision on that application in August 2024. For DEFI, the next confirmed milestones are the Aug. 17 end of trading and the expected cash distribution to remaining shareholders on or about Aug. 28.
Source: decrypt.co