Overview of the Nasdaq Crypto Index (NCI)
The Nasdaq Crypto Index™ (NCI) is a pioneering cryptocurrency market benchmark co-developed by Nasdaq and Hashdex. Designed to represent the broader crypto asset class, the NCI employs a market-cap-weighted methodology and undergoes quarterly recalculations to ensure accuracy and relevance.
Key Features:
- Market-Cap Weighting: Reflects the relative size of each constituent crypto asset.
- Quarterly Rebalancing: Maintains up-to-date market representation.
- Strict Eligibility Criteria: Ensures only high-quality, tradable assets are included.
- Institutional-Grade Custody: Requires assets to be supported by licensed custodians.
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Eligibility Criteria for the Nasdaq Crypto Index
To be included in the NCI™, crypto assets must meet rigorous standards:
1. Tradable on Two Exchanges
Assets must have active trading markets on at least two exchanges since the last index reconstitution. This ensures liquidity and accessibility.
2. Supported by Licensed Custodians
Assets must be backed by at least one reputable custodian, ensuring secure storage for institutional investors.
3. Minimum Market Representation
Assets must demonstrate sufficient trading volume—at least 0.5% of the highest-volume asset—to avoid illiquidity risks.
4. Free-Floating Pricing
Stablecoins or pegged assets (e.g., fiat-collateralized tokens) are excluded to focus on non-pegged, freely traded cryptocurrencies.
5. Exchange Eligibility
Assets must qualify for listing on major exchanges like SIX Swiss Exchange and Xetra, ensuring broad market access.
Related Investment Products
Hashdex Nasdaq Crypto Index Funds
| Name | Description | AUM | Availability |
|---|---|---|---|
| Hashdex Nasdaq Crypto Index ETF | Provides broad crypto exposure for institutional investors. | $763M | Cayman Islands |
| Hashdex Nasdaq Crypto Index Fund | U.S.-available fund mirroring the NCI’s composition. | $763M | USA |
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FAQs About the Nasdaq Crypto Index
1. What is the purpose of the NCI?
The NCI serves as a reliable benchmark for investors seeking exposure to the cryptocurrency market, offering a standardized measure of performance.
2. How often is the NCI rebalanced?
The index is recalculated quarterly to reflect market changes and maintain accuracy.
3. Can stablecoins be included in the NCI?
No. The index excludes pegged assets to focus on free-floating cryptocurrencies.
4. Who can invest in NCI-linked funds?
Currently, only institutional clients can access Hashdex’s NCI-based ETFs and funds.
5. What custodians support NCI assets?
Licensed providers like Coinbase Custody and Fidelity Digital Assets meet the NCI’s custody requirements.
Conclusion
The Nasdaq Crypto Index™ (NCI) bridges traditional finance and digital assets, offering investors a transparent, rules-based benchmark for cryptocurrency markets. With its stringent eligibility criteria and institutional-grade design, the NCI is poised to become a cornerstone of crypto investment strategies.
For further insights, explore our detailed guides on crypto indexing and portfolio diversification.
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