2026-01-17 15:21:51

The Ethereum ETF products that were hard-won are now being announced for liquidation—what exactly happened behind the scenes?

A news report on January 17th caught many off guard. Defiance officially announced it would close and liquidate its Nasdaq-listed Ethereum exchange-traded fund—Defiance Leveraged Long & Yield Ethereum ETF (ETHI). Even more heartbreaking is that this ETF was listed for less than four months before being liquidated.

This is not an isolated case. Defiance also announced the closure of seven other leveraged long & yield ETF products, namely PLT, HOOI, SMCC, AMDU, HIMY, TRIL, LLYZ. Liquidating so many ETFs at once indeed reflects certain realities of the current market.

From regulatory breakthroughs to product launches and finally to liquidation, this process may involve factors such as insufficient trading volume, declining market demand, and a disconnect between product design and the actual market. For institutional investors looking to participate in Ethereum investments, such changes will inevitably impact their asset allocation strategies.

ETH1,82%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

16 Likes

Reward
16
10
Repost
Share

Comment

0/400

GasFeeWhisperer

· 01-20 15:20

It was shut down after just four months, the level of embarrassment is unparalleled.

View OriginalReply0

MevTears

· 01-20 14:36

Clearing in just four months, this leveraged ETF is really powered by love. --- Again, low trading volume, in other words, nobody wants it. --- Regulatory breakthroughs are so difficult, yet the product didn't last long... It's ironic. --- Institutional investors must be so exhausted, just after adjusting their positions, they have to move again. --- Clearing eight at once, Defiance, are you giving up? --- Wait, these leveraged products are inherently flawed, right? --- I just want to know whose money got trapped, hahaha. --- The road for Ethereum ETF is so tough, it always seems to be a struggle. --- Trading volume can't support it, the market indeed cooled off a bit. --- This still reflects the insufficient real demand from institutions for on-chain assets.

View OriginalReply0

GovernancePretender

· 01-20 14:19

Four months? That's hilarious. How bad does it have to be to cool off so quickly?

View OriginalReply0

just_another_fish

· 01-17 23:58

Four months? I really didn't expect this speed. What happened to the promised long-term holding?

View OriginalReply0

ForkTongue

· 01-17 15:51

Four months and it's gone. Are you joking?

View OriginalReply0

ProbablyNothing

· 01-17 15:48

Cleared in just four months, how exhausting... Wait, leveraged ETFs are basically a trap, right? Another "victory" for regulatory authorities, but in reality, no one uses them. A bunch of products dying together is definitely a structural issue. So, are there any reliable ETH investment channels now? Defiance really shot itself in the foot this time. Leverage products are doomed to be short-lived, indeed. Institutional investors probably already ran away, can't blame them. That's why I still prefer to hold spot directly. It's painful to watch, wasting regulatory policy dividends for nothing.

View OriginalReply0

LootboxPhobia