Nasdaq Crypto Index (NSI): Track Cryptocurrency Performance

The Nasdaq Crypto Index (NSI) is a comprehensive benchmark tailored to measure the performance of a substantial segment of the digital asset market. This index was developed through a collaboration between Nasdaq and Hashdex, with the primary goal of providing institutional investors with a dependable and dynamic representation of the rapidly changing cryptocurrency landscape. By encompassing a wide range of digital assets, the NSI serves as an essential tool for investors looking to gauge market trends and make informed investment decisions.

The NSI employs a thorough and transparent methodology designed to accurately represent the evolving cryptocurrency market. The key aspects of its methodology include:

• Eligibility Criteria:

  • Liquidity and Trading: To qualify for inclusion in the NSI, assets must be actively traded on at least two vetted core exchanges and supported by a minimum of one core custodian. This ensures that only well-established assets with adequate market activity are considered.
  • Custody Standards: The index limits inclusion to assets supported by at least two core custodians, which guarantees that only those assets with robust institutional infrastructure and security measures are represented in the index.

• Weighting: The index utilizes a free-float market capitalization-weighted approach. This means that the weight of each asset in the index is based on its market value, adjusted for the available supply in the market. This methodology ensures that larger, more established assets have a greater impact on the index’s overall performance.

• Rebalancing and Reconstitution: The NSI undergoes rebalancing and reconstitution on a quarterly basis to accurately reflect market developments and shifts in asset performance. This regular adjustment ensures that the index remains a reliable representation of the current cryptocurrency market landscape.

As of January 29, 2025, the NSI comprises a diverse array of cryptocurrencies, each contributing to the overall market representation:

• Bitcoin (BTC): 73.21%
• Ethereum (ETH): 16.53%
• Solana (SOL): 5.32%
• Ripple (XRP): 2.18%
• Cardano (ADA): 1.04%
• Chainlink (LINK): 0.44%
• Avalanche (AVAX): 0.44%
• Litecoin (LTC): 0.35%
• Polygon (MATIC): 0.26%
• Uniswap (UNI): 0.22%

These weightings reflect the relative market capitalization of each asset within the index, providing investors with a clear view of the dominant players in the cryptocurrency sector.

To uphold high standards of security and reliability, the NSI exclusively includes assets traded on vetted core exchanges and supported by reputable core custodians. The recognized core exchanges and custodians include:

Core Exchanges:

• BitStamp
• Coinbase
• Gemini
• itBit
• Kraken
• LMAX Digital

Core Custodians:

• BitGo
• Coinbase
• Fidelity
• Gemini
• Zodia (effective December 2, 2024)
• Komainu (effective December 2, 2024)

These institutions have been selected based on rigorous standards that prioritize the integrity and security of the assets included in the index. By utilizing these trusted platforms, the NSI aims to provide investors with a secure framework for cryptocurrency investments.

In 2024, the NSI underwent significant updates to enhance its accuracy and representation of the cryptocurrency market:

• Expansion of Core Custodians: The addition of Zodia and Komainu as core custodians, effective December 2, 2024, broadened the custodial support for assets within the index. This expansion enhances the security and reliability of the assets represented in the NSI.

• Methodology Enhancements: The index’s methodology was refined to improve accuracy and resilience, including updates to the eligibility criteria and an increase in the frequency of rebalancing schedules. These enhancements reflect the dynamic nature of the cryptocurrency market and ensure that the NSI remains relevant and effective for investors.

The Nasdaq Crypto Index serves as a crucial tool for investors looking to navigate the complexities of the evolving cryptocurrency landscape. By offering a transparent and systematic approach to tracking the performance of digital assets, the NSI empowers investors to make informed decisions in the realm of cryptocurrency investments. With its robust methodology and commitment to security, the NSI stands out as a reliable benchmark for assessing the performance of cryptocurrencies and guiding investment strategies.