10-Q: Hashdex Crypto ETF Reports Q1 2026 Results

Hashdex Nasdaq CME Crypto Index ETF reports a decrease in net assets for Q1 2026, primarily due to market performance of underlying crypto assets.

Summary

• The Hashdex Nasdaq CME Crypto Index ETF (NCIQ) reported a decrease in net assets from $121,287,477 as of December 31, 2025, to $98,081,994 as of March 31, 2026.
• This decrease was driven by a net decrease in assets from operations of $(29,540,506), attributed to operating expenses and market performance of underlying crypto assets.
• Net asset value per share decreased from $22.71 at the beginning of the period to $17.24 at the end of Q1 2026.
• The ETF's investment objective is to align with the daily price changes of the Nasdaq CME Crypto Settlement Price Index (NCIS).
• Effective January 20, 2026, the ETF changed its reference index from the Nasdaq Crypto US Settlement Price Index (NCIUSS) to the NCIS.
• The management fee was reduced from 0.50% to 0.25% per annum, effective March 16, 2026.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative sentiment due to the significant decrease in net assets and NAV per share, despite a reduction in management fees.

Positives

• Management fee reduced from 0.50% to 0.25% per annum, effective March 16, 2026, which should lower ongoing expenses for investors.
• The ETF continues to track a recognized crypto index, providing a structured way for investors to gain exposure to the crypto market.
• Disclosure controls and procedures were deemed effective as of March 31, 2026.

Negatives

• Net assets decreased by approximately $23.2 million during the quarter, from $121,287,477 to $98,081,994.
• Net asset value per share declined from $22.71 to $17.24.
• The ETF experienced a net decrease in net assets from operations of $(29,540,506) for the three months ended March 31, 2026.
• Total return at net asset value for the three months ended March 31, 2026, was -24.11%.

Risks

• The majority of the Trust's assets are holdings of bitcoin, creating concentration risk associated with fluctuations in bitcoin's price.
• Other crypto assets held (Ethereum, XRP, Solana, Cardano, Chainlink, Stellar) are subject to similar risks including price volatility and regulatory uncertainty.
• A decline in the price of bitcoin or other crypto assets could materially adversely affect the Fund's net asset value.
• Market disruption, such as government regulatory actions, can make it difficult to liquidate a position.
• The Trust has a limited number of institutions that act as Authorized Participants, and if these institutions exit the business, it could adversely affect liquidity and potentially lead to trading halts or delisting.

Future Outlook

The Trust's investment objective is to align with the daily price changes of the Nasdaq CME Crypto Settlement Price Index (NCIS). The Sponsor will employ a passive investment strategy to track the Index. The Trust will not invest in any crypto assets other than the Index Constituents, nor will it invest in tokenized assets or stablecoins. The Index is reconstituted and rebalanced quarterly.

Management Comments

• The Trusts investment objective is to align the daily changes in the net asset value (NAV) of the Shares with the daily price changes of the Index, minus operational expenses and liabilities, by investing in the digital assets that are constituents of the Index or may be added as constituents of the Index in the future.
• The Sponsor will employ a passive investment strategy intended to track the changes in the Index, regardless of its direction, meaning that the Sponsor will not attempt to outperform the Index.
• The Sponsor has agreed to assume most of the expenses incurred by the Trust, with the only ordinary expense being the Sponsors Management Fee.

Industry Context

StockSavvy.ai notes that the Hashdex Nasdaq CME Crypto Index ETF's performance is directly tied to the volatility of its underlying crypto assets and the effectiveness of its tracking of the Nasdaq CME Crypto Settlement Price Index. The recent management fee reduction is a positive step in aligning costs with investor value, especially in a market segment known for its price fluctuations.

Comparison to Industry Standards

• The ETF's expense ratio of 0.25% (net expenses) is competitive within the crypto ETF space, though some broader market ETFs may have lower fees.
• The concentration risk in Bitcoin (76.80% of assets) is a common characteristic of broad crypto index funds, reflecting Bitcoin's market dominance.
• The NAV per share decline of 24.11% in Q1 2026 reflects the broader market downturn experienced by major cryptocurrencies during that period, which is typical for this asset class.

Management Changes

Legal Proceedings

• As of March 31, 2026, the Trust was not subject to any material legal proceedings, nor are any material legal proceedings threatened against the Trust or the Sponsor.

Related Party Transactions

• The Sponsor (Hashdex Asset Management Ltd.) is considered a related party.
• The Sponsor provided initial seed creation of 10,000 Shares on January 21, 2025, which were redeemed on February 13, 2025.
• As of March 31, 2026, the Trust had a liability to the Sponsor of $21,195 for the March Management Fee.
• The Hashdex Nasdaq Crypto Index Fund (NCI), managed by the Sponsor, holds 4,000,000 Shares of the Trust.

Stakeholder Impact

• Shareholders experienced a significant decrease in the value of their investment during the quarter, as reflected by the drop in NAV per share.
• The reduction in management fees is a positive for shareholders, potentially increasing net returns.
• The concentration risk in Bitcoin and other crypto assets means shareholders are highly exposed to market volatility in these assets.

Next Steps

• The Index will be reconstituted and rebalanced quarterly on the first Business Day in March, June, September, and December.
• The Sponsor will continue to monitor and adjust the Trusts portfolio to align with the Nasdaq CME Crypto Settlement Price Index.

Key Dates

Recommendation

The ETF's performance is heavily tied to the volatile crypto market. While the reduction in management fees is positive, the significant decline in NAV and the inherent risks of crypto assets warrant a cautious approach. Investors should monitor the crypto market and the ETF's tracking of its underlying index.

Keywords

Hashdex Nasdaq CME Crypto Index ETF, NCIQ, Cryptocurrency ETF, Digital Assets, Nasdaq CME Crypto Settlement Price Index, Bitcoin, Ethereum, SEC Filing, Form 10-Q, Quarterly Report