The Defiance Digital Revolution ETF will cease activity by the end of February.

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The Defiance Digital Revolution ETF will close. Image: Defiance ETFs

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

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

When it kicked off trading in December 2021, Defiance ETFs co-founder and Chief Investment Officer Sylvia JablonskisaidNFTs “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 fundfell11% 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 KuCoinlaunched its own NFT ETFallowing 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. Theyexploded in 2021and many celebrities openly invested or created their own NFTs. Major companies—likeEbayandFunko—also got involved by investing in NFT marketplaces.

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 onelaunchedin October 2021, it exploded and sold nearly $1 billion on its debut.

BitcoinspotETFs, 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 facedrejection.