Hashdex's DEFI Begins Trading as Spot Bitcoin ETF

Hashdex's DEFI Begins Trading as Spot Bitcoin ETF

The former futures fund began trading Wednesday, months after its competitors that have pulled in billions from investors.

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Finance Reporter
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Reviewed by: etf.com Staff
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Edited by: Ron Day

Hashdex Asset Management Ltd., the Brazilian crypto investment firm with nearly $1 billion in assets, said its spot bitcoin ETF has begun trading, six months after the company sought to convert it from a futures fund and finally giving the company a foothold in the new and competitive spot bitcoin race.

The Hashdex Bitcoin ETF (DEFI) launched as a bitcoin futures exchange-traded fund in 2022 as the Hashdex Bitcoin Futures ETF (note to readers: as of March 27, etf.com's fund page hasn't updated to reflect DEFI's changes). On Wednesday it dropped about 1 percent to $79.07. In its final days as a futures product, more than $16 million was withdrawn.

The $11.6 million fund starts out among the smallest spot bitcoin funds despite its previous life as a traded futures ETF. That may prove a disadvantage in a market where size and low fees have helped the big issuers like BlackRock Inc., whose iShares Bitcoin Trust (IBIT) has hauled in $15.5 billion since it started trading in January, among the fastest growth rates in the history of the industry. Still, the company noted in its press release that it sees bitcoin as a once-in-a-lifetime occasion.

"Since our founding in 2018, Hashdex has strongly believed that bitcoin is a generational opportunity," the company's chief executive officer said in a press release.

The new spot bitcoin ETFs have pulled in $34.2 billion since their early January launch. That doesn't include the Grayscale Bitcoin Trust ETF (GBTC), which held billions as a trust before converting to an ETF.

Hashdex, which issued the fund with Tidal Investments, is still in the process of converting DEFI to a spot fund. According to the fund description, more than 60% of its assets are in bitcoin futures. The fund owns 5,500 bitcoins, making up 34% of the fund. It may continue to keep as much as 5% of its assets in futures or cash equivalents.

In mid-January, the SEC approved a group of ten novel spot bitcoin ETFs after a decade long regulatory battle. While Hashdex was expected to launch on January 11 with the other funds, they never reached the final step of regulatory approval to start trading. While the exchange’s 19b-4 filing was approved, Hashdex’s S-1 registration statement was not greenlit.

Bitcoin’s price has skyrocketed, reaching an all-time high in mid-March at over $73,000.

The ETF went through review from the National Futures Association, a spokesperson said.

Spot Bitcoin Excitement

Even though the launch is months after the ten other spot products launched, analysts say that the demand for spot bitcoin ETFs is high enough that DEFI may still be competitive and pull in cash.

“The getting is so good right now i could see this one getting some bites (if the fee is competitive) despite being so late,” said Bloomberg Senior ETF analyst Eric Balchunas in a post.

The fund’s fee is currently listed as 0.90%, although many issuers have slashed fees after trading.

Contact Lucy Brewster at [email protected].

Lucy Brewster is a finance reporter at etf.com covering asset managers, emerging technologies, and regulation. She hosts etf.com webinars and appears on Exchange Traded Fridays, etf.com’s flagship podcast. She previously was a finance fellow at Fortune Magazine where she covered markets, investment strategy, and venture capital. She has also been a freelancer writer at the publication Mergers & Acquisitions and a research fellow at the Historic Hudson Valley. 

She graduated from Vassar College in 2022 with a degree in History and was an editor of The Miscellany News, the college's award winning student run newspaper. 

Lucy lives in Brooklyn, NY, and in her free time she loves to run and find new recipes to cook.