The Nasdaq Crypto Index (NCI) represents a major milestone in the evolution of digital asset markets. Developed in partnership between Nasdaq and Hashdex, the NCI is designed to offer investors a reliable, rules-based benchmark that captures the performance of the most significant and liquid cryptocurrencies in the global market.
Updated on January 7, 2025, this index combines rigorous eligibility criteria with transparent methodology, making it a trusted reference for institutional and retail investors alike. By focusing on market capitalization weighting and quarterly rebalancing, the NCI ensures a dynamic yet stable representation of the crypto ecosystem.
Whether you're evaluating investment vehicles or seeking clarity on how top-tier digital assets are selected, the NCI provides a structured, transparent framework grounded in financial market best practices.
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How the Nasdaq Crypto Index Works
At its core, the Nasdaq Crypto Index™ (NCI™) is a market-cap-weighted index, meaning that each included crypto asset’s influence on the index performance is proportional to its total market value. This approach mirrors traditional equity indices like the S&P 500, bringing familiar logic to the digital asset space.
The index is rebalanced quarterly, ensuring that shifts in market dynamics—such as surges in a particular cryptocurrency’s value or declining trading activity—are reflected in a timely and systematic way. This regular recalibration helps maintain accuracy and relevance in a fast-moving market.
Importantly, only digital assets that meet strict eligibility standards are considered for inclusion. These criteria are designed to ensure liquidity, security, regulatory compliance, and market maturity—key factors that institutional investors demand.
Hashdex, as co-developer of the index, plays a critical role in its administration and ongoing oversight, helping bridge innovation in blockchain with the rigor of traditional finance.
Eligibility Criteria for Inclusion in the NCI
To maintain integrity and investor confidence, the NCI enforces a robust set of requirements that any cryptocurrency must satisfy to qualify for inclusion.
Traded on Multiple Qualified Exchanges
A crypto asset must be actively traded on at least three qualified cryptocurrency exchanges since the previous index rebalance. This ensures sufficient liquidity and market depth, reducing the risk of manipulation and enabling large-scale investment access.
Exchange quality matters: platforms must meet regulatory, operational, and transparency standards to be considered "qualified." This prevents low-volume or unregulated markets from skewing index composition.
Supported by Institutional Custodians
Security is paramount. Eligible assets must be supported by at least two licensed institutional custodians. These are regulated third-party services that securely store digital assets using advanced encryption and cold storage solutions.
This requirement addresses a major barrier for traditional financial institutions: the technical complexity and risk of self-custody. By relying on trusted custodians, funds and ETFs can safely gain exposure to crypto without managing private keys themselves.
Minimum Market Representation
To prevent small or illiquid assets from distorting the index, a cryptocurrency must have an average daily trading volume (in USD pairs) of at least 0.5% of the asset with the highest trading volume across major exchanges.
For example, if Bitcoin has an average daily volume of $20 billion, any candidate must generate at least $100 million per day in trading volume. This threshold ensures only meaningful market participants are included.
Floating Price Mechanism
The NCI excludes any digital asset whose price is pegged or algorithmically stabilized to another asset—such as stablecoins tied to the US dollar. Only assets with freely floating market prices determined by supply and demand are eligible.
This preserves the index’s purpose: to reflect the performance of speculative, innovation-driven crypto assets—not stable or synthetic instruments.
Eligible for ETP Listing
Finally, a crypto asset must be eligible for listing as an Exchange-Traded Product (ETP) on two major European exchanges: SIX Swiss Exchange and Xetra (Deutsche Börse). This criterion ensures regulatory acceptability and investor accessibility across key global markets.
Meeting these standards signals not just technical viability but also regulatory readiness—making such assets more attractive to pension funds, asset managers, and other conservative investors.
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Why the NCI Matters for Investors
The Nasdaq Crypto Index fills a critical gap in the digital asset landscape: a transparent, auditable benchmark that reflects true market conditions without bias or manipulation.
Unlike proprietary indices or self-reported rankings, the NCI is governed by clear rules and updated regularly with verifiable data. This makes it ideal for:
- Index-tracking ETFs and mutual funds
- Performance benchmarking
- Risk modeling and portfolio allocation
- Regulatory reporting
Moreover, because it’s backed by Nasdaq—a globally recognized name in financial markets—the NCI brings credibility to an industry still working to earn mainstream trust.
For investors, this means greater confidence when allocating capital to crypto-related products linked to the index.
Products Based on the Nasdaq Crypto Index
Several investment vehicles have been launched to provide exposure to the NCI, allowing investors to gain diversified access to top cryptocurrencies through regulated structures.
- Hashdex Nasdaq Crypto Index FI (Brazil)
An ETF available to retail investors in Brazil that replicates the NCI, offering diversified exposure to eligible crypto assets. With over R$3.77 billion in assets under management (AUM), it's one of the largest crypto-focused funds in Latin America. - Hashdex Nasdaq Crypto Index ETF (Cayman Islands)
Designed for institutional clients, this fund offers broad-based digital asset exposure in a jurisdiction familiar to global investors. It holds approximately $763 million in AUM. - Hash 100 (Brazil)
A mutual fund providing 100% dynamic exposure to cryptocurrencies based on the same strict eligibility rules defined by the NCI. Currently manages R$526 million in assets. - Hashdex Crypto Selection FIC FIM (Brazil)
An actively managed fund allocating 100% into crypto assets based on Hashdex’s investment themes and market outlook. Holds R$50.8 million in AUM. - Hashdex Crypto Top Performers (Brazil)
A momentum-driven strategy that invests in recently outperforming cryptocurrencies, potentially increasing allocation to smaller-cap assets with high growth potential. Manages R$41.1 million in AUM.
These products demonstrate growing demand for structured, rules-based crypto investment solutions—especially those tied to reputable indices like the NCI.
Frequently Asked Questions (FAQ)
Q: What is the Nasdaq Crypto Index (NCI)?
A: The NCI is a market-cap-weighted index developed by Nasdaq and Hashdex to track the performance of major cryptocurrencies that meet strict liquidity, custody, and regulatory criteria.
Q: How often is the NCI rebalanced?
A: The index is recalculated and rebalanced on a quarterly basis to reflect changes in market conditions and asset eligibility.
Q: Which cryptocurrencies are included in the NCI?
A: The specific constituents are not listed here, but only those meeting all five eligibility criteria—exchange availability, custodial support, trading volume, floating price, and ETP listing eligibility—are included.
Q: Can retail investors access the NCI?
A: Yes. Through products like the Hashdex Nasdaq Crypto Index FI in Brazil, retail investors can gain exposure to the index via regulated ETFs and mutual funds.
Q: Why does custodial support matter for index inclusion?
A: Institutional custody ensures secure storage of digital assets by licensed providers, which is essential for regulated funds and investor protection.
Q: Is the NCI similar to other crypto indices?
A: While other indices exist, the NCI stands out due to its association with Nasdaq, transparent methodology, and alignment with global exchange listing standards.
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Final Thoughts
The Nasdaq Crypto Index (NCI) represents a convergence of traditional finance principles and blockchain innovation. With its emphasis on transparency, security, and regulatory alignment, it sets a new standard for how digital assets are measured and invested in.
As crypto continues maturing into a mainstream asset class, benchmarks like the NCI will play an increasingly vital role—guiding investment decisions, enabling product development, and building long-term trust.
For forward-thinking investors, understanding indices like the NCI isn’t just about tracking performance—it’s about navigating the future of finance with confidence.
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