Hashdex is closing and liquidating its $14.7 million spot bitcoin ETF, DEFI, with the final trading day set for August 17 and proceeds to be distributed to shareholders after the remaining bitcoin are sold. DEFI was the smallest U.S. spot bitcoin ETF by net assets; WisdomTree’s BTCW ranked second-smallest with $142.4 million, while BlackRock’s IBIT was the market leader with $47.08 billion in net assets. The total U.S. spot bitcoin ETF market held $77.6 billion in net assets and recorded $51.5 billion in cumulative net inflows.
The closure of Hashdex’s DEFI ETF occurs in a context where the total U.S. spot bitcoin ETF market commands $77.6 billion in net assets, having experienced $51.5 billion in cumulative net inflows. Despite this growth, the market has seen three months of net outflows amid dwindling interest in bitcoin investments, as investors increasingly pivot toward artificial intelligence (AI)-related opportunities. BlackRock’s iShares Future AI & Tech ETF exemplifies this trend, with its value rising by 39% through July, amassing $3.6 billion in assets while the broader crypto market recorded declines of about 36%, as indicated by the CoinDesk 20 Index. Market sentiment reflects observations by Vetle Lunde, who noted growing opportunity costs of holding bitcoin paired with strong investor interest in AI sectors.
Concentration of inflows further skewed toward major players in the ETF space, with BlackRock’s IBIT receiving the largest share at $60.5 billion, followed by Fidelity’s FBTC at approximately $9.95 billion. In contrast, Grayscale’s GBTC saw significant outflows totaling $27.47 billion. This redistribution of investor focus and funds underscores the shifting dynamics within the sector, leading to strategic closures such as that of Hashdex’s DEFI.
Hashdex’s DEFI fund was launched as a bitcoin futures ETF in September 2022 and was converted to a spot bitcoin ETF in late March 2024, about three months after BlackRock’s IBIT launched. Hashdex entered the U.S. spot bitcoin ETF market after competitors. DEFI charged a 0.25% expense ratio, matching fees charged by BlackRock and Fidelity. The fund’s conversion from futures to spot occurred as the broader U.S. spot ETF lineup was taking shape.
Prior closures in the bitcoin ETF space have involved futures-based products; for example, VanEck’s XBTF closed in 2024. No U.S. fund holding bitcoin directly had previously been liquidated before Hashdex’s DEFI. Separately, Cosmos Asset Management in Australia withdrew its bitcoin and ether ETFs in November 2022 after attracting about A$1.1 million in combined assets. These examples provide precedent for closures in the ETF market but do not include a prior U.S. liquidation of a spot bitcoin fund.
Hashdex is closing and liquidating its DEFI spot bitcoin ETF, with remaining bitcoin to be sold and proceeds distributed to shareholders as the fund is wound down. Market participants said the closure illustrates concentrated flows and shifting investor preferences within the U.S. spot bitcoin ETF landscape, and broader market commentary indicated this move is unlikely to presage the end of spot bitcoin ETFs.
