Hashdex Nasdaq CME Crypto Index ETF Annual Report - How They Did This Year

I’m here to help you break down the latest annual report for the Hashdex Nasdaq CME Crypto Index ETF (NCIQ). We will skip the complex financial talk and focus on what matters to you as an investor.

1. What does this fund do?

Think of NCIQ as a "crypto basket." Instead of opening accounts on multiple exchanges to buy Bitcoin, Ethereum, or Solana, you simply buy shares of this ETF on the Nasdaq. The managers use a "passive" strategy. They don't try to pick winners or trade actively. They simply hold the assets in the index and keep them safe with top-tier custodians like Coinbase Custody and BitGo. These partners use secure offline storage and carry insurance against theft or loss.

2. Financial performance

The fund charges a 0.25% annual management fee. With an average fund size of about $150 million, this generates roughly $375,000 in annual revenue to cover administrative, legal, and custody costs. Think of this as the price of admission for professional security and management. If the fund’s cash runs low, they may sell a small portion of their crypto to cover these operating costs, which is why the total expense ratio is slightly higher than the base fee.

3. Major wins and changes this year

The biggest update happened on January 20, 2026. The fund switched its benchmark to the Nasdaq CME Crypto Settlement Price Index. This system uses an average price calculated during the final 10 minutes of the trading day to help prevent price manipulation by smoothing out the wild swings that often happen on individual crypto exchanges.

As of late 2025, the fund held seven major assets: Bitcoin (65%), Ether (25%), and a 10% mix of XRP, Solana, Cardano, Chainlink, and Stellar. The fund avoids "meme coins" and rebalances monthly to keep the weightings accurate.

4. Financial health

The fund values transparency. Every 15 seconds, they publish an Indicative Trust Value (ITV), which shows you exactly what your shares are worth in real-time. They also keep a cash buffer of about 0.5% of total assets to help pay for daily redemptions and trading costs without selling crypto prematurely.

5. Key risks

• Volatility: You are riding the crypto wave. If the market crashes, the fund crashes. The fund has historically seen drops of over 20% in a single month.
• Technical Errors: The fund earns rewards by "staking" Ethereum. If the network penalizes the fund for technical errors, your investment value could dip. While they use professional validators, a major error could cost 1% to 5% of the staked assets.
• Extra Costs: Beyond the 0.25% fee, the fund pays for trading commissions and transfer fees, which can add 0.05% to 0.15% to your total costs.
• Liquidity: If everyone sells at once, the gap between the buying and selling price may widen, meaning you might end up selling your shares for slightly less than the actual value of the crypto held inside.

6. Competitive positioning

NCIQ aims to be the professional choice. By using a strict index and insured custodians, they offer a safer alternative to standard retail crypto apps. Unlike those apps, NCIQ provides a clear tax form (1099-DIV) that is easy to manage in your brokerage account.

7. Future outlook

The fund is built to adapt. The new index methodology can change if U.S. regulators update the rules for crypto trading. Management is positioning this as the go-to vehicle for investors who want crypto exposure with the safety of a traditional stock market product. They may add more assets in the next 1–2 years if those coins meet the Nasdaq’s strict requirements.

Final Thought for Investors: NCIQ is designed for those who want broad exposure to the crypto market without the hassle of managing private keys or multiple exchange accounts. Before you invest, make sure you are comfortable with the inherent volatility of the crypto market and the specific risks associated with staking and fund-level expenses.