NFTZ, widely touted as the world’s first exchange-traded fund for NFTs, is shutting down. 

Defiance ETFs announced that it will “close and liquidate” NFTZ, its Defiance Digital Revolution ETF, by February 28.

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When it kicked off trading in December 2021, Defiance ETFs co-founder and Chief Investment Officer Sylvia Jablonski said NFTs “could be bigger than the internet.”

NFTZ tracked companies involved in the NFT (non-fungible token) and cryptocurrency space—including toy collectibles company Funko, online marketplace Ebay, and digital asset exchange Coinbase. Shares of the Fund were listed on the New York Stock Exchange.

The fund fell 11% to US$21.66 from US$24.41 in its first two days of trading.

ETFs are popular investment vehicles offering indirect exposure to an underlying asset through shares—like gold, foreign currencies or Bitcoin. This allows investors to expand their portfolios without having to store such assets. 

NFTZ is an ETF that allowed investors to have a stake in a number of companies somehow related to the NFT space. Last July, crypto exchange KuCoin launched its own NFT ETF allowing users to own proportionally shared ownership of native blue-chip NFTs like the Bored Ape Yacht Club.

NFTs are cryptographically unique tokens linked to digital (or physical) content. They exploded in 2021 and many celebrities openly invested or created their own NFTs. Major companies—like Ebay and Funko—also got involved by investing in NFT marketplaces. 

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But since the price of Bitcoin and every other coin and token in the ecosystem has nosedived, interest in the crypto world has waned—and this includes NFTs. 

Bitcoin and crypto futures ETFs have found a market in the U.S.—at least during the bull run: When the first one launched in October 2021, it exploded and sold nearly $1 billion on its debut.  

Bitcoin spot ETFs, which directly track the biggest digital currency, do not yet exist in the U.S. Many major crypto companies have applied to the SEC to launch one, but have only faced rejection

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