Here’s the big picture for DeFi, Bitcoin ETFs


The rapid pace of crypto-adoption is increasing opportunities for investments in the market. And in doing so, many new investment tools have appeared over the years. The arrival of ETFs, DeFi, Metaverse, and more has expanded the scope for people to invest in. Here’s the latest in this mix of products…

DeFi ETFs are here

Last week, Hashdex announced its DeFi ETF, DeFi11, which managed to attract over 2,200 investors and raised $10.5 million. However, this launch came after QR Capital listed its own DeFi ETF, QDFI11, on 8 February 2022.

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As the first of its kind, these Exchange Traded Funds (ETFs) differ from Bitcoin ETFs significantly. Especially since they use more than one underlying asset in the form of different DeFi tokens.

In the case of QDFI11 (QR Capital), the ETF comprises of nine DeFi tokens. These include Uniswap, AAVE, Maker DAO, Curve, yearn.finance, Compound, SushiSwap, Synthetic, and Ox. 

However, the decision to launch them when the entire market is suffering did not play in their favor. Looking at these DeFi ETFs’ performance, it becomes evident that the prevalent market conditions definitely reflected their performance. 

QDFI11, which was listed on 8 February, has not seen a single good day on the price front. Since its listing at 12.10 Brazilian Real (BRL), the ETF has slipped by 44.55% to trade at 6.71 BRL. 

QR Capital QDFI11 ETF price action | Source: TradingView – AMBCrypto

The other DeFi ETF, DeFi11, although listed just four days ago, has actually performed worse. Dropping by 19.17% and trading at 39 BRL, the ETF lost 6.5% the day it was listed.

Hashdex DeFi11 ETF price action | Source: TradingView – AMBCrypto

Furthermore, over the last few days, trading volumes have been falling significantly, touching the lows of 46k BRL, which translates to just $9,092. Owing to the performance of the underlying assets, the ETFs are failing to draw in much investment.

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The likes of UniswapAAVE, and Maker DAO have each lost about 31.29%, 31.60%, and 27.55%, respectively. 

Bitcoin ETFs on the other hand…

Are performing better somehow.

Although even the S&P 500 Index has been tumbling, Bitcoin ETFs have managed to maintain their netflows. CoinShares report, for instance, found that throughout the month, except for CoinShares XBT and 3iQ, all other ETFs were stable with volumes ranging from $9.2 million to $116.9 million. 

Bitcoin ETFs performance in February | Source: CoinShares

This, despite the fact that Bitcoin and the rest of the market still haven’t recovered. Trading under $40k, BTC is continuing to invalidate all the recovery it made towards the end of January. Such is the state of the entire market as well, which has resulted in an overall loss of $358.64 billion in the last 12 days.

Thus, while DeFi ETFs open the doors to new investors and new vehicles of investment, it will be a while before they actually see a positive response.

Because right now, due to the lack of awareness about DeFi, as well as their dependency on Bitcoin and the broader market, they will not be able to rise above the king coin anytime soon.


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