Nasdaq CME jointly launches a crypto index, including BTC, ETH, and seven major assets

Nasdaq and CME integrate their crypto indices, rebranded as the “Nasdaq-CME Crypto Index,” including seven major assets such as BTC and ETH. In 2021, they authorized Hashdex to issue products, with a scale exceeding $1 billion, including the US’s first multi-asset crypto ETF (NCIQ). A joint governance committee was established, with CF Benchmarks responsible for calculation. Investors are shifting from single Bitcoin holdings to index-based investments.

A Trust Revolution in Institutional-Grade Governance Led by Two Giants

For institutional investors, governance mechanisms are a key factor in evaluating crypto investments. The new Nasdaq CME Crypto Index is jointly managed by Nasdaq and CME Group, responsible for overseeing index operations, including only approved exchanges and custodians, and adjusting according to market and regulatory changes. Index calculation is handled by CF Benchmarks, a long-term partner and provider of crypto asset benchmark indices.

This dual-institution governance model is extremely rare in financial history. Nasdaq, as the second-largest stock exchange globally, and CME, the largest derivatives exchange worldwide, jointly endorse the crypto index, lending authority far beyond any single native crypto organization. For compliance departments and risk management committees in traditional finance, the “Nasdaq + CME” combination provides a solid trust foundation for approving crypto asset allocations.

Giovanni Vicioso, Director of Stock and Alternative Products at CME Group, states that this design aims to make investors feel that the institutional standards for crypto assets are gradually approaching those of traditional financial markets. This “approach to traditional” strategy is crucial because institutional investors do not need crypto to “disrupt” anything; they only need crypto assets to “meet” existing risk management frameworks.

Three Institutional Advantages of Dual-Governance System

Strict Approval: Only approved exchanges and custodians are included, excluding unreliable platforms

Transparency: Index methodology includes component eligibility, liquidity thresholds, weighting, and quarterly adjustment mechanisms

Dynamic Adjustment: Components are adjusted based on market and regulatory changes to avoid regulatory risks

Wasserman states that the crypto market is still in growth phase and requires joint governance by two experienced, risk-averse international institutions to build trust. Nasdaq also publicly discloses the index methodology, emphasizing transparency as a core principle. This transparency is extremely important for institutional investors, as they need to explain to their investment committees and regulators why they allocate to crypto assets. The open and transparent index methodology provides a solid basis for these explanations.

From Single Bitcoin Allocation to Diversified 7-Asset Index Logic

Sean Wasserman, Head of Index Product Management at Nasdaq, states in an official announcement that investors are shifting from a mindset of “only looking at Bitcoin” to using indices to represent the entire crypto market, similar to how traditional assets like stocks and bonds use indices as market thermometers. This mindset shift reflects the natural evolution of institutional investment theory.

In asset allocation theory, concentrated investment in a single asset is considered high-risk. Even assets like Bitcoin, often called “digital gold,” have volatility far exceeding traditional assets. Institutional investors are constrained by risk budgets and drawdown limits, preventing them from allocating large sums to a single crypto asset. However, through diversified indices covering 7 assets, risk is spread out, significantly reducing volatility, enabling institutions to allocate larger proportions of capital.

The seven included assets—BTC, ETH, XRP, SOL, LINK, ADA, AVAX—are not randomly chosen but meet strict screening criteria. These assets must satisfy liquidity thresholds (daily trading volume), market cap requirements (to avoid manipulation of small coins), custody feasibility (supported by regulated custodians), and compliance (not privacy coins or tokens clearly violating regulations).

Wasserman emphasizes that this index is not just for tracking market trends but aims to serve as the foundation for ETFs, structured products, active funds, and other financial instruments. In the future, investors can use this index for risk management, capital allocation, and diversification, similar to stock portfolios. This shift from “market indicator” to “investment infrastructure” marks a significant step toward the maturity of the crypto market.

As demand for regulated crypto investment products continues to grow, financial products based on the Nasdaq-CME Crypto Index are expected to expand further. Hashdex’s NCIQ is just the beginning; future products may include futures, options, structured products, and even pension funds based on this index. Each new product will bring additional institutional capital into the crypto market.

$1 Billion Scale and the Demonstration Effect of Hashdex NCIQ

NCIQ was first launched in 2021, then licensed to crypto asset management firm Hashdex to issue related products in the US, Europe, and Latin America. The total assets under management have now exceeded $1 billion, including the US’s first multi-asset crypto index ETF, “Hashdex Nasdaq Crypto Index US ETF” (ticker NCIQ). While this $1 billion scale is smaller compared to hundreds of billions in Bitcoin ETFs, its symbolic significance is substantial.

As the first multi-asset crypto index ETF in the US, NCIQ breaks the limitation that crypto ETFs can only be Bitcoin or Ethereum. Before NCIQ, the SEC only approved spot ETFs for Bitcoin and Ethereum, excluding other crypto assets. NCIQ, through indexing, allows investors to allocate to multiple mainstream crypto assets simultaneously, paving the way for future approval of more diversified crypto ETFs.

The achievement of over $1 billion in assets demonstrates genuine market demand for crypto index products. It is not just a proof of concept or small pilot; it is a mature product attracting tens of thousands of investors and hundreds of millions of dollars. Seeing Hashdex’s success, more asset managers are likely to follow with similar products, creating a network effect.

Both parties agree that as investor demand for regulated crypto investment products continues to rise, products based on the Nasdaq-CME Crypto Index are expected to further expand. This expansion involves not only scale but also product variety. Based on this index, different risk profiles and investment goals can be met: conservative investors may choose low-volatility enhanced index products, aggressive investors may opt for leveraged index ETFs, and institutions can use index futures for hedging.