Hashdex will close and liquidate its US-listed Bitcoin ETF, DEFI, after the fund struggled to attract enough assets and trading activity to remain viable.
Summary
- DEFI held approximately $14.7 million in assets as of July 30.
- The fund’s final trading day is Aug. 17, followed by its NYSE Arca delisting.
- Remaining shareholders should receive a cash liquidation payment around Aug. 28.
- Hashdex’s separate $206.8 million NCIQ crypto index ETF remains active.
DEFI will stop trading on Aug. 17
According to a WSJ report, asset management company Hashdex said the Hashdex Bitcoin ETF, which trades on NYSE Arca under the DEFI ticker, will stop trading after the market closes on Aug. 17. The company will then begin liquidating the fund’s assets and delist its shares.
The fund will also stop accepting creation orders from authorized participants after that date. Investors can continue buying and selling shares through their brokers until the final trading session, although market prices may differ from the fund’s net asset value as the closure approaches.
Hashdex attributed the decision to several factors, including the fund’s asset base, trading liquidity, operating expenses and investor demand. DEFI managed about $14.7 million as of July 30, placing it among the smaller US spot Bitcoin products.
The fund’s website listed a net asset value of $71.32 per share and a closing price of $71.15 as of July 31. DEFI normally invests at least 95% of its assets in spot Bitcoin, with the remainder available for cash, cash equivalents, and CME-listed Bitcoin futures.
Shareholders will receive cash after liquidation
Investors who continue holding DEFI shares after the final trading day will not receive Bitcoin. Instead, the fund will sell its holdings and distribute the remaining proceeds in cash after deducting its liabilities and liquidation costs.
Hashdex expects to make the distribution around Aug. 28. The amount shareholders receive will depend partly on Bitcoin’s price while the portfolio is being liquidated, meaning the final payment may differ from DEFI’s net asset value before trading ends.
The liquidation could also create tax consequences for US investors. A cash distribution may be treated as a taxable disposal, depending on the shareholder’s cost basis, account type and individual circumstances.
Investors who sell their shares before Aug. 17 will receive the prevailing market price rather than the final liquidation value. Trading volume and the spread between bid and ask prices could become more important as the fund approaches delisting.
Hashdex faced heavy competition from larger Bitcoin ETFs
DEFI entered the US spot Bitcoin ETF market through a conversion of an existing futures-based product. The fund began holding spot Bitcoin in March 2024, more than two months after the SEC approved the first wave of spot Bitcoin ETFs in January.
That timing placed DEFI behind larger competitors that had already accumulated substantial assets and trading volume. Its relatively small asset base made it harder to compete on liquidity, despite charging a 0.25% expense ratio.
The closure does not signal Hashdex’s exit from the US crypto ETF market. Its separate Hashdex Nasdaq CME Crypto Index ETF, trading under NCIQ, held about $206.82 million in net assets as of July 31.
NCIQ currently provides market-cap-weighted exposure to Bitcoin, Ethereum, XRP, Solana, Cardano, Chainlink, Stellar and Bitcoin Cash. Bitcoin represented 78% of its portfolio as of July 27, while Ethereum accounted for 12.2%.
Hashdex also reduced NCIQ’s annual management fee from 0.50% to 0.25% in March. The fund was renamed from the Hashdex Nasdaq Crypto Index US ETF in January but retained its existing ticker.
DEFI investors face three remaining dates
DEFI shareholders now face a short liquidation timeline. Aug. 17 will be the final day to sell shares on NYSE Arca and the cutoff for new creation orders. Hashdex will then unwind the portfolio before making the expected cash payment around Aug. 28.
Bitcoin price changes during that period will affect the fund’s remaining assets and, in turn, its final distribution. Investors who retain their shares through liquidation should also expect the position to disappear from their brokerage accounts once the cash payment is processed.
The closure applies only to DEFI and does not affect NCIQ or Hashdex’s other crypto investment products.
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