The crypto ETF landscape is undergoing yet another shift. Defiance ETFs, a Miami-based investment firm, announced on Thursday that it is shutting down its Ethereum ETF. The firm plans to liquidate the ETF on January 30, 2026, giving investors time to decide on their next moves. The U.S. SEC approved spot Ethereum ETFs in May 2024, with trading beginning in July, and since then, it has attracted big players in the financial markets from BlackRock to Grayscale. Since then, Ethereum’s ETFs have pulled in between $12.5 to $14 billion, bringing total assets under management to over $20 billion. Tidal Financial Group and Defiance pull ETFs Defiance ETFs launched the Ethereum ETFs in September 2025, and after just four months of trading, pulled it off the market. The ETF is known as Defiance Leveraged Long + Income Ethereum ETF (ETHI), and is currently trading at $6.95. It was aimed at delivering between 150%-200% of the daily performance of other Ethereum-based products. On January 16, Defiance ETFs and Tidal Financial Group announced their decision to pull eight ETFs, including the Ethereum ETF from the market. The board of trustees said this is part of Defiance ETFs’ effort to review its lineup of product offerings and give investors a more focused suite of investments. The delisted funds will be traded up until January 26, 2026, after which they will accept no more orders. Investors will continue to hold their shares until January 30, 2026, when the funds will be automatically liquidated and redeemed for cash at the net asset value (NAV) on the day of liquidation. Competition is stiff in crowded ETF market Defiance emphasized that its decision to cut Ethereum ETFs is to provide its investors with more tailored investment opportunities. Institutional demand for crypto ETFs has been on the rise and hit record levels in 2025. Spot Bitcoin and Ethereum ETFs saw a combined $50 billion in inflows with about $170 billion in total assets under management. Defiance’s closure potentially highlights an increase in competition within the U.S. crypto ETF market. For smaller ETF providers, gaining traction in this environment has become increasingly difficult. According to reports, the ETF experienced about $6.4 million in inflows, but long-term returns of -66%. ETFs require scale to remain viable, with ongoing costs tied to compliance, fund administration, custody, marketing, and distribution. When assets under management fail to reach sustainable levels, maintaining a product becomes economically unfeasible, regardless of broader market demand. Sharpen your strategy with mentorship + daily ideas - 30 days free access to our trading program
