Hashdex has announced that it will cease trading its DEFI Bitcoin ETF after the close on August 17, providing investors with a final opportunity to exit before the fund is liquidated. Investors who remain after trading concludes will receive cash from the liquidation of the fund’s Bitcoin holdings by August 28, as per an SEC filing. The payout will reflect the fund’s net asset value after factoring in Bitcoin price movements, transaction costs, and other closing expenses.
The impending deadline has already led to a decrease in the fund’s size. Data from Hashdex revealed that as of August 11, DEFI held approximately $8.7 million in assets and 134.95 BTC, down from $11.77 million and 180.26 BTC on August 7. Moreover, the number of outstanding shares dropped from 160,000 to 120,000 over the same period, indicating a 25% decline as investors redeemed their positions ahead of the shutdown.
Despite the return of funds to US spot Bitcoin ETFs, with $865.3 million in net inflows recorded between August 3 and August 7, the DEFI ETF saw a decrease in assets. BlackRock’s IBIT accounted for the majority of the inflows at $693.5 million, leaving a smaller portion for the rest of the market. The streak of positive inflows ended on August 10, with an aggregate outflow of $144.6 million recorded by the group.
The closure of DEFI highlights the discrepancy between strong headline Bitcoin ETF flows and weaker demand for individual products. Although IBIT’s dominance does not directly explain the decision to shut down DEFI, it underscores the varying levels of demand within the market.
DEFI transitioned from a Bitcoin futures strategy to direct Bitcoin holdings in March 2024 but struggled to attract significant capital. Despite the broader expansion of the spot Bitcoin ETF market, DEFI experienced limited inflows and outflows since its conversion. The fund’s filings indicate challenges in attracting capital, with net outflows recorded in recent years.
While DEFI’s Bitcoin ETF is set to shut down, Hashdex asserts that it remains committed to the US market, managing over $200 million in products available to American investors.
