Crypto asset manager Hashdex is closing and liquidating its US-listed spot Bitcoin exchange-traded fund, marking one of the first shutdowns of a spot Bitcoin ETF since the products were approved in the United States. The Hashdex Bitcoin ETF (NYSE Arca: DEFI) will cease trading on August 17, after which the fund will be liquidated and shareholders will receive cash distributions based on the value of the fund’s underlying Bitcoin holdings. Cash payments are expected to be made around August 24, subject to the completion of the liquidation process.
The ETF currently manages approximately $14.3 million in net assets, making it one of the smallest spot Bitcoin funds in the US market. The closure follows a review of the fund’s operational viability and comes as competition among spot Bitcoin ETF issuers continues to intensify. Hashdex did not indicate that the decision reflected a change in its long-term view of Bitcoin. Instead, the liquidation appears to be driven by commercial considerations, including the fund’s relatively modest asset base and investor demand.
Fund Struggled to Gain Scale
Hashdex’s ETF has faced an uphill battle since entering an increasingly crowded market dominated by larger issuers. BlackRock’s iShares Bitcoin Trust (IBIT), Fidelity’s Wise Origin Bitcoin Fund (FBTC) and several other spot Bitcoin ETFs collectively manage tens of billions of dollars in assets, leaving smaller products competing for a limited share of institutional and retail investment flows.
Although Hashdex was among the earliest firms to pursue regulated Bitcoin investment products, its US-listed ETF never achieved the scale necessary to compete effectively with the industry’s largest offerings. The fund itself has an unusual history. It originally launched as a Bitcoin futures ETF before converting into a spot Bitcoin ETF in 2024 following US regulatory approval for physically backed Bitcoin products. Despite the conversion, assets remained relatively small compared with rival funds. Following the liquidation announcement, investors holding shares until the liquidation date will receive cash equal to their proportionate interest in the fund’s net assets after liabilities and expenses are settled.
Competition Intensifies in Spot Bitcoin ETF Market
The closure highlights the increasingly competitive economics of the US spot Bitcoin ETF industry. While total assets across spot Bitcoin ETFs continue to grow, much of that capital has become concentrated in a handful of dominant issuers with strong distribution networks, lower fees and established institutional relationships.
For smaller asset managers, maintaining an ETF with limited assets can become commercially challenging because operating expenses are spread across a relatively small investor base. The liquidation also illustrates that regulatory approval alone does not guarantee commercial success. Since the launch of spot Bitcoin ETFs, investors have overwhelmingly favored a small group of market leaders, leaving several smaller products with limited trading volumes and assets under management.
Hashdex continues to operate other cryptocurrency investment products globally and remains active in digital asset index investing. The decision to liquidate this particular ETF therefore represents a product rationalization rather than a withdrawal from the cryptocurrency market. As the spot Bitcoin ETF sector matures, further consolidation may follow. Asset managers with smaller funds could increasingly choose to merge, reposition or close products that fail to attract sufficient investor interest, reinforcing a market where scale and distribution have become as important as exposure to Bitcoin itself.