The primary-ever exchange-traded fund targeted on NFTs and metaverse belongings has introduced closure because the crypto winter continues to assert extra victims.
The Defiance Digital Revolution ETF, which is listed on the NYSE beneath the ticker NFTZ, will shut down by the tip of February, in keeping with a latest press release. The fund will start liquidating its portfolio belongings beginning February 16, and will not settle for orders for brand spanking new creation models after that day.
“Previous to the Liquidation Date, shareholders might solely have the ability to promote their shares to sure broker-dealers, and there’s no assurance that there will probably be a marketplace for the Fund’s shares throughout that point interval,” the announcement stated.
Launched in December 2021, the fund is supplied by Defiance ETFs and is constructed to trace the BITA NFT and Blockchain Choose Index, an index that tracks blockchain-related firms and non-fungible tokens. Shares within the fund are down by more than 72% since its debut.
The fund’s closure comes because the hype over NFTs and metaverse belongings has cooled down dramatically over the previous yr amid the broader market downturn that has seen main cryptocurrencies like Bitcoin and Ethereum lose round 70% of their worth in comparison with all-time highs.
In response to NFT consultants at Casinos En Ligne, gross sales of non-fungible tokens saw a downfall of 83 p.c year-over-year in 2022. Furthermore, throughout all of the markets, together with artwork, gaming, and collectibles, NFT transaction quantity plunged by not less than 83 p.c.
The NFT house surged to an all-time excessive in January 2022 with month-to-month gross sales reaching $2.8 billion. Nonetheless, that quantity noticed a steep drop by earlier this yr following a string of bankruptcies and implosions that noticed round $2 trillion worn out of the crypto market.
Regardless of the massacre within the NFT market, quite a lot of high-profile firms have introduced plans to broaden each into NFTs. Only in the near past, Amazon revealed that it plans to launch a “digital belongings enterprise” targeted on non-fungible tokens and Web3 gaming this spring.
In November, a patent submitting revealed Sony’s imaginative and prescient for a system that may very well be used to trace the creation, use, and switch of digital belongings created inside a sport. The patent envisions a system for “creating, modifying, monitoring, authenticating, and/or transferring distinctive digital belongings” related to video video games.
Moreover, funding big Constancy additionally hinted at an intent to push deeper into cryptocurrencies and Web3 with three new emblems filed in December final yr. The filings have a deal with NFTs and digital worlds just like the Metaverse.
