Hashdex will liquidate its DEFI exchange-traded fund after Aug. 17, in what appears to be the first closure of a U.S. spot bitcoin ETF. The $14.7 million fund trails every rival by assets, as investors have shifted toward AI-related investments.
Crypto asset manager Hashdex is set to close and liquidate its DEFI spot bitcoin exchange-traded fund, in what may be the first liquidation of a U.S. spot bitcoin offering. The fund's final day of trading is Aug. 17, after which Hashdex will sell the remaining bitcoin and distribute the cash proceeds to shareholders, according to a filing with the U.S. Securities and Exchange Commission.
AI returns pull capital away from bitcoin
Hashdex cited the fund's assets under management, liquidity, operating costs, investor interest and its place within the company's broader lineup when announcing the closure. Flows into U.S. spot bitcoin ETFs have dwindled as investors chase the returns offered by AI-related investments instead. The funds were first approved in January 2024. The group has posted net outflows in each of the past three months, according to data from SoSoValue.
K33 Research head Vetle Lunde wrote in a June report that much of the market sees the cost of holding bitcoin as too high while AI-related assets soar. BlackRock's iShares Future AI & Tech ETF, by contrast, gained 39% through July and held $3.6 billion in assets while the broader crypto market fell roughly 36%, based on the CoinDesk 20 Index.
DEFI trails a growing ETF market
DEFI is the smallest U.S. spot bitcoin ETF by net assets and recorded the lowest cumulative net inflows, according to SoSoValue data. WisdomTree's BTCW, the next-smallest, holds $142.4 million in net assets. Market leader BlackRock's IBIT holds $47.08 billion.
Yet DEFI's struggles contrast with the broader market. The wider spot bitcoin ETF market holds $77.6 billion in net assets and has drawn a cumulative $51.5 billion in net inflows since the funds launched. Of that, $60.5 billion has flowed into IBIT alone and roughly $9.95 billion into Fidelity's FBTC. Grayscale's GBTC has seen $27.47 billion of outflows since converting from a trust.
Hashdex also entered the spot bitcoin market later than rivals, converting DEFI from a futures ETF into a spot product in late March 2024, nearly three months after IBIT's launch, while charging the same 0.25% expense ratio as BlackRock and Fidelity. The company is not leaving the U.S. crypto ETF market, though: it still manages more than $200 million across its remaining products, including the diversified Hashdex Nasdaq Crypto Index US ETF.
Spot crypto ETF closures have already occurred outside the U.S. Cosmos Asset Management pulled its Australia-listed bitcoin and ether ETFs in November 2022, just six months after their debut, after the funds attracted only about $710,000 in combined assets.
Source: CoinDesk
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