Nasdaq-backed Crypto ETF Goes Live in Bermuda

The Hashdex Nasdaq Crypto Index ETF, a crypto-focused, exchange-traded fund (ETF), has been listed on the Bermuda Stock Exchange (BSX), according to a press release.

This ETF is a joint project of Brazilian fund manager Hashdex and American stock exchange Nasdaq. It was first revealed in September 2020 when BSX announced the listing. At the time, the exchange also revealed that the ETF comprised three million Class E shares at $1,000 each.

The ETF comprises a basket of cryptocurrencies. The lion’s share of it is made up of Bitcoin (78.61%) and Ethereum (16.86%), with Bitcoin Cash, Chainlink, Litecoin, and Stellar Lumens amounting to between 0.65% and 1.58% each.

"The Nasdaq Crypto Index represents another leap towards the institutionalisation of crypto as investors look for broader exposure to the digital asset class," said Sui Chung, CEO of CF Benchmarks, the calculation agent for the Nasdaq crypto index.

"Built and calculated to the standards that are expected by traditional financial institutions, indices like the NCI and others offered by CF Benchmarks are fast becoming the launchpad for a whole host of financial products that will ultimately make cryptocurrencies ever more accessible to a wider audience, driving adoption all around the world," he added.

Crypto ETFs allow institutional investors to get exposure to digital assets without actually buying or holding them. An ETF usually tracks or follows the price of an asset or a bulk of them traded as a single traditional instrument. Since ETFs can be freely traded on traditional stock markets, their holders can indirectly invest in Bitcoin or other cryptocurrencies.

In practice, however, no American company has been able to launch a Bitcoin ETF so far as the Securities and Exchange Commission (SEC) has been turning down all the corresponding proposals over the last couple of years. As it stands, ETFs are currently still illegal in the US.

A close alternative to an ETF is a cryptocurrency trust. For example, the Grayscale Bitcoin Trust has over $27.3 billion worth of BTC under its management—and regularly buys more coins on behalf of its clients. This is largely filling the gap until a Bitcoin ETH is approved.

As Decrypt reported last December, the Toronto Stock Exchange announced its first Ethereum-based ETF after the 3iQ Ether Fund raised over $75 million in contributions from Canadian investors.

Recently, Valkyrie Digital Assets, a crypto-focused subsidiary of investment firm Valkyrie Investments, has become the latest company to file an application for a Bitcoin ETF with the SEC.