tl;dr
Nasdaq has updated its Crypto US Index (NCIUS) to include XRP, Stellar (XLM), Solana (SOL), and Cardano (ADA), expanding beyond its original tracking of Bitcoin (BTC) and Ethereum (ETH). Hashdex, which offers an ETF tracking NCIUS, can only hold BTC and ETH due to SEC restrictions and uses a samplin...
Nasdaq has expanded its Crypto US Index (NCIUS) to include XRP, Stellar (XLM), Solana (SOL), and Cardano (ADA), moving beyond its initial focus on Bitcoin (BTC) and Ethereum (ETH). This update aims to capture a more comprehensive portion of the digital asset market.
Hashdex, which offers an ETF tracking the NCIUS, faces restrictions from the SEC that limit its holdings to only BTC and ETH. To address the discrepancy between the ETF's holdings and the index composition, Hashdex employs a sampling strategy designed to approximate exposure to the complete index. However, this method carries the risk of tracking errors due to the inability to hold the newly included cryptocurrencies directly.
In response, Nasdaq has proposed a rule change to the SEC to allow Hashdex’s ETF to switch its benchmark from the NCIUS to the broader Nasdaq Crypto Index (NCI). The NCI includes not only the six cryptos currently in NCIUS but also Litecoin (LTC), Uniswap (UNI), and Chainlink (LINK). This change would enable a more accurate replication of the index by the ETF.
The SEC is currently reviewing Nasdaq's proposed rule change, with a decision anticipated by November. Should the rule change be approved, it will open the door for Hashdex’s ETF to provide broader crypto market exposure, reflecting the evolving landscape of digital assets more effectively.