Nasdaq Crypto Index provides XRP, SOL, ADA, and XLM as SEC critiques Hashdex ETF’s request to align holdings
The Nasdaq Crypto Index expanded its lineup from 5 to 9 digital belongings. The SEC’s choice is pending on whether or not the Hashdex NCIQ ETF, which tracks this index, can be allowed to align its portfolio with the expanded index.
The Nasdaq Crypto Index just lately expanded its composition from 5 to 9 digital belongings, including Ripple (XRP), Solana (SOL), Cardano (ADA), and Stellar Lumens (XLM). Beforehand, the index included solely Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Chainlink (LINK), and Uniswap (UNI).
The up to date index serves because the benchmark for the Hashdex Nasdaq Crypto Index US ETF. Nonetheless, the NCIQ ETF is at the moment not permitted to carry the newly added belongings as a result of present SEC guidelines, which restrict it to investing in Bitcoin and Ethereum solely.
To alter this, Nasdaq ISE, LLC filed a proposed rule change with the SEC on March 7. If authorised, the ETF can be allowed to align its holdings with the revised index and make investments straight within the further altcoins. The SEC has till Nov. 2 this 12 months to challenge a call.
Within the meantime, Hashdex is utilizing a sampling technique, adjusting its allocations to Bitcoin and Ethereum in an effort to replicate the broader index’s efficiency. Nonetheless, this workaround introduces monitoring error threat, the place the ETF’s returns could diverge from these of the index it goals to comply with.
The Hashdex Nasdaq Crypto Index US ETF is a regulated funding fund that goals to provide buyers diversified publicity to the crypto market by monitoring the Nasdaq Crypto Index. The U.S. Securities and Alternate Fee authorised the NCIQ ETF in December final 12 months, permitting it to start buying and selling on Nasdaq with publicity restricted to Bitcoin and Ethereum.
Earlier this 12 months, Hashdex — the asset administration agency behind the NCIQ ETF — achieved a serious milestone by receiving approval from Brazil’s securities regulator to launch the world’s first XRP spot ETF, the Hashdex Nasdaq XRP Index Fund, which can be listed on the B3 inventory alternate.