The Defiance Digital Revolution ETF, the first-ever exchange-traded fund that focuses on nonfungible tokens (NFTs), is set to be liquidated at the end of February, it was announced in a press release.
Sylvia Jablonski, CEO and CIO at Defiance ETFs, explained that the decision to close the fund comes after the fund “failed to attract assets.” The company will start to liquidate the ETF’s portfolio on February 16.
NFTs, which allow holders of art and collectibles to track ownership, surged in popularity during 2021 and the early stages of 2022 during the cryptocurrency rally, however, the hype around NFTs has since plummeted, particularly as the Federal Reserve’s tighter monetary policy has made for a more restrictive environment for speculative assets.
“As you start to hit that crypto winter that we’re in, it makes sense that a lot of the investments that are based off of that entire segment are going to start drying up,” Shawn Cruz, head trading strategist at TD Ameritrade, said of the NFT dropoff.
With its portfolio nearing $14 million at its height in March 2022, the Defiance Digital Revolution ETF is seeing out January with around $5.3 million in assets.