The US spot Bitcoin ETF market is preparing for its first closure. Crypto asset manager Hashdex has decided to liquidate its Bitcoin fund, which trades under the ticker DEFI, after the product failed to attract sufficient investor interest.
According to a filing submitted to the SEC, the fund will cease trading on NYSE Arca on August 17, 2026. Hashdex will then sell the Bitcoin held by the fund and distribute the remaining proceeds to investors in cash.
DEFI will stop trading on August 17
Hashdex said it decided to liquidate the fund after evaluating its assets under management, trading liquidity, operating costs and investor demand. DEFI held only $14.48 million in net assets as of August 3.
That figure is considerably smaller than the roughly $47 billion held by BlackRock’s IBIT, the largest US spot Bitcoin ETF. The gap suggests that investors increasingly favor larger and more liquid products when choosing between funds that provide similar exposure.
August 17 will be DEFI’s final trading day. The fund will also stop accepting new share creation orders after that date.
Hashdex will begin converting the portfolio into cash on August 18. Investors who still hold shares after the final trading day are expected to receive a cash distribution on or around August 24.
Bitcoin will be sold during the liquidation
DEFI’s portfolio consists entirely of Bitcoin and held $14.48 million in net assets as of August 3.
Based on the current Bitcoin price, Hashdex could liquidate approximately 225 BTC during the process. The final amount may change depending on investor sales before August 17 and movements in Bitcoin’s price.
The sale could create limited short-term pressure. However, 225 BTC is not large enough to disrupt the broader market when compared with Bitcoin’s daily trading volume.
The decision still carries symbolic weight. While cryptocurrency ETFs based on futures contracts have closed before, DEFI may become the first US spot ETF holding Bitcoin directly to enter liquidation.
Concentration is increasing in the Bitcoin ETF market
Hashdex’s decision shows that growth in the spot Bitcoin ETF market has not been distributed evenly among issuers. A large share of investor capital has flowed into highly liquid funds operated by companies such as BlackRock, Fidelity and Grayscale.
Smaller funds face higher operating costs when trading activity remains low. As a result, other Bitcoin ETFs that fail to reach sufficient scale could also face closure, even if their issuers reduce management fees.
Bitcoin was trading at around $64,150 on August 5. BTC had gained 1.12% over the previous 24 hours, moving between $63,558 and $64,467.
Bitcoin’s daily trading volume stood at approximately $23.1 billion during the same period. The estimated 225 BTC that Hashdex could sell was worth about $14.4 million based on the fund’s current size.
The potential sale therefore represents approximately 0.06% of Bitcoin’s daily trading volume. Hashdex will also begin selling the fund’s assets on August 18, meaning the current price action does not yet reflect the actual liquidation transactions.
