Nasdaq aims to broaden crypto ETF exposure by including altcoins like XRP, SOL, ADA, and XLM in the benchmark index.
The Hashdex ETF may soon hold nine assets if the SEC approves Nasdaq's proposed benchmark shift from NCIUS to the broader NCI.
The SEC’s DeFi roundtable seeks to balance innovation and investor protection as crypto regulation gains national focus.
Nasdaq has proposed a rule change to the U.S. Securities and Exchange Commission (SEC) that could reshape the crypto ETF space. Filed on June 2, 2024, under Rule 19b-4, the proposal aims to update the benchmark for the Hashdex Nasdaq Crypto Index US ETF (NCIQ). Nasdaq plans to broaden the current benchmark, transitioning from the Nasdaq Crypto US Settlement Price Index (NCIUS) to the more inclusive Nasdaq Crypto Index (NCI). This shift comes as Nasdaq recently refreshed its benchmark to include XRP, Solana (SOL), Cardano (ADA), and Stellar Lumens (XLM), alongside existing assets Bitcoin (BTC) and Ethereum (ETH).
A Move Toward Broader Exposure
The NCI now tracks nine leading cryptocurrencies. Besides BTC and ETH, it includes XRP, SOL, ADA, XLM, Chainlink (LINK), Litecoin (LTC), and Uniswap (UNI). Consequently, the proposed change would allow the Hashdex ETF to reflect a broader segment of the crypto market. However, the fund currently holds only BTC and ETH due to SEC regulations. This results in a tracking mismatch, as the ETF mirrors a six-asset index but invests in two.
To address this, Hashdex applies a sampling strategy. However, the approach cannot fully eliminate tracking error. Hence, investors may still face divergence between index performance and ETF returns. If approved, the ETF would gain flexibility to include all nine cryptocurrencies. This would mark a milestone for the U.S.-listed digital asset funds.
Regulatory Dialogue Gains Momentum
Additionally, the SEC is promoting decentralized finance (DeFi) public interaction. A conversation titled “DeFi and the American Spirit” will be held by the Commission at its headquarters in Washington, D.C., on June 9, 2025. Commissioner Hester Peirce and the SEC's Crypto Task Force are spearheading the event as part of a larger initiative.
Key figures including SEC Chair Paul Atkins will participate. Topics will include smart contracts, token governance, and automated blockchain systems. Moreover, panelists will explore regulatory clarity and investor protection in decentralized ecosystems.
Commissioner Peirce emphasized the need for open communication with the developer community. She called for meaningful dialogue to help regulators better understand emerging financial models. The outcome of this roundtable could influence how DeFi fits into the U.S. regulatory framework moving forward.
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