The Hashdex Nasdaq Crypto Index ETF recently went live on the Bermuda Stock Exchange. The fund is designed to provide institutional investors an entry into cryptocurrencies without the risk of holding them physically.
What is the ETF all about?
The Hashdex Nasdaq Crypto Index ETF is a joint venture between US-based stock exchange Nasdaq and Brazilian fund manager Hashdex. The product was first announced in September last year. At the time, Bermuda Stock Exchange (BSX) revealed that the ETF will be comprised of three million Class E shares valued at $1,000 each.
The ETF comes with a basket of top digital currencies, but 78.61% of its value is tied to Bitcoin, the largest cryptocurrency in the world. Ethereum compresses 16.86% of the fund while Bitcoin Cash, Litecoin, Stellar Lumens, and Chainlink hold anywhere between 0.65% to 1.58% share each.
Talking about the offering, CF Benchmarks CEO Sui Chung said,
“The Nasdaq Crypto Index represents another leap towards the institutionalization of crypto as investors look for broader exposure to the digital asset class.”
Eyeing alternative finance
CF Benchmark is the calculation agent for the Nasdaq crypto index. Chung said that indices like NCI and several others from their firm are quickly becoming a Launchpad for a new range of financial products. They will ultimately help in making cryptocurrencies more widely accessible and drive adoption around the world.
Crypto ETFs now allow institutional investors to get exposure to digital assets without having to hold them physically. The ETF simply tracks the price of an asset or a basket of assets and can be traded freely on the stock markets. The ETF holders can also invest in Bitcoin indirectly.
While other jurisdictions are opening up to this new variety of financial instruments, the US Securities and Exchange Commission (SEC) has not accepted a single application for a Bitcoin ETF to date. Since exchange-traded funds are still illegal in the US, investors only have one way to get indirect exposure to Bitcoin i.e., via a Trust. Grayscale, one of the largest crypto asset managers in the world, also runs the Grayscale Bitcoin Trust.