Defiance ETFs, an investment firm based in Miami, has announced the forthcoming liquidation of its Ethereum ETF. The firm plans to formally close the ETF on January 30, 2026, providing investors with a defined timeframe to manage their holdings.
The U.S. Securities and Exchange Commission (SEC) approved spot Ethereum ETFs in May 2024, with trading commencing in July. Since their introduction, these ETFs have attracted significant interest from major financial institutions, including BlackRock and Grayscale.
Since the launch of Ethereum ETFs, they have collectively attracted between $12.5 billion and $14 billion in assets, contributing to a total of over $20 billion in assets under management within the Ethereum ETF market.
Tidal Financial Group and Defiance Announce ETF Withdrawals
Defiance ETFs launched its Ethereum ETF in September 2025. After only four months of trading activity, the firm has decided to withdraw the product from the market. The ETF, known as the Defiance Leveraged Long + Income Ethereum ETF (ETHI), is currently trading at $6.95. Its objective was to provide investors with daily performance returns ranging from 150% to 200% of other Ethereum-based products.
On January 16, Defiance ETFs, in conjunction with Tidal Financial Group, officially announced their decision to delist eight ETFs, including the Ethereum ETF. The board of trustees stated that this move is part of Defiance ETFs’ ongoing strategy to review its product offerings and provide investors with a more concentrated selection of investment opportunities.
The delisted funds will continue to be available for trading until January 26, 2026, after which no further orders will be accepted. Investors will retain their shares until January 30, 2026. On this date, the funds will be automatically liquidated, and investors' shares will be redeemed for cash based on the net asset value (NAV) of the day of liquidation.
Intense Competition Characterizes the Crowded ETF Market
Defiance has indicated that its decision to discontinue the Ethereum ETFs is aimed at offering investors more specialized investment avenues. The firm's announcement suggests a strategic pivot towards a more focused product suite.
Institutional demand for cryptocurrency ETFs has experienced a notable surge, reaching record levels in 2025. Spot Bitcoin and Ethereum ETFs combined saw inflows totaling $50 billion, with their total assets under management reaching approximately $170 billion.
The closure of Defiance's Ethereum ETFs may reflect the increasing competition within the U.S. crypto ETF market. For smaller ETF providers, achieving significant market presence and attracting investor capital has become a considerable challenge in this environment.
Reports indicate that the Defiance ETF experienced approximately $6.4 million in inflows but recorded long-term returns of -66%. The viability of ETFs is often contingent on achieving substantial scale, which helps to offset ongoing costs related to compliance, fund administration, custody, marketing, and distribution.
When assets under management do not reach levels sufficient to sustain operations, continuing to offer a product can become economically unfeasible, irrespective of broader market interest or demand.