10-Q: Hashdex Crypto ETF Reports Significant NAV Drop

Hashdex Nasdaq CME Crypto Index ETF's Q2 2026 report reveals a substantial decline in Net Asset Value per Share and significant unrealized losses on its crypto asset holdings.

Summary

• The Hashdex Nasdaq CME Crypto Index ETF (NCIQ) reported a Net Asset Value (NAV) per share of $14.58 as of June 30, 2026, a decrease from $22.71 at the end of 2025.
• Total net assets increased to $190,069,351 from $121,287,477 as of December 31, 2025, primarily due to capital inflows from share creations.
• The ETF experienced a net realized and unrealized loss of $23,828,927 for the three months ended June 30, 2026, and a loss of $53,303,145 for the six months ended June 30, 2026.
• Management fees were reduced from 0.50% to 0.25% per annum, effective March 16, 2026.
• The ETF's investment objective is to track the Nasdaq CME Crypto Settlement Price Index (NCIS).

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative sentiment due to a significant decrease in Net Asset Value per Share and a substantial unrealized loss on crypto assets during the period, despite a reduction in management fees.

Positives

• Management fee reduced from 0.50% to 0.25% per annum, effective March 16, 2026.
• Total net assets increased to $190,069,351 as of June 30, 2026, from $121,287,477 as of December 31, 2025, driven by net capital inflows from share creations.
• The Trust has no material legal proceedings as of June 30, 2026.

Negatives

• Net Asset Value per Share decreased significantly to $14.58 as of June 30, 2026, from $22.71 as of December 31, 2025.
• The ETF recorded a net realized and unrealized loss of $23,828,927 for the three months ended June 30, 2026, and a loss of $53,303,145 for the six months ended June 30, 2026.
• Investments in crypto assets, particularly Bitcoin, represent a significant concentration risk.
• The Trust experienced a substantial change in unrealized depreciation of $23,556,362 for the three months ended June 30, 2026.

Risks

• The majority of the Trust's assets are holdings of bitcoin, creating a concentration risk associated with fluctuations in its price.
• Other crypto assets held by the Trust (Ethereum, XRP, Solana, Cardano, Chainlink, Stellar, and Bitcoin Cash) are subject to similar risks including price volatility and regulatory uncertainty.
• Changes to the Index Rules or its administration by Nasdaq, Inc. or CF Benchmarks Limited may adversely affect the Trust.
• A market disruption, such as government regulatory actions, can make it difficult to liquidate a position.
• The Trust may need to sell crypto assets to pay fees and expenses if its cash balance is insufficient.

Future Outlook

The Trust expects to commence staking activities promptly following the effectiveness of agreements entered into on July 23, 2026, subject to operational readiness. Staking activities are expected to be conducted through Coinbase Cloud Pte. Ltd. The Trust does not intend to establish a credit facility and will rely on cash and cash equivalents for liquidity.

Management Comments

• The Trust is designed to provide investors with price exposure to certain crypto assets.
• The Sponsor will employ a passive investment strategy intended to track the changes in the Index, regardless of its direction.
• The Trust will not invest in any crypto assets other than the Index Constituents, nor will it invest in tokenized assets or stablecoins.
• The Trust is not aware of any trends, demands, conditions or events that are reasonably likely to result in material changes to its liquidity needs.

Industry Context

StockSavvy.ai notes that the crypto ETF market continues to evolve, with entities like Hashdex adapting their strategies, including fee structures and operational capabilities like staking, in response to market dynamics and regulatory landscapes. The significant unrealized losses reflect the inherent volatility of the crypto asset market.

Comparison to Industry Standards

• The management fee reduction to 0.25% aligns more closely with competitive offerings in the crypto ETF space, though some competitors may offer lower fees for specific assets.
• The introduction of staking capabilities is a developing trend in crypto-focused ETFs, aiming to generate yield beyond simple price appreciation, a feature not yet widely adopted across all crypto ETFs.
• The concentration risk in Bitcoin (78.57% of net assets as of June 30, 2026) is typical for broad crypto index funds, but differs from single-asset ETFs or more diversified traditional asset ETFs.

Management Changes

Corporate Governance

Legal Proceedings

• As of June 30, 2026, the Trust was not subject to any material legal proceedings, nor, to our knowledge, 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 June 30, 2026, the Trust has a liability to the Sponsor of $31,542 for the June 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 Net Asset Value per Share, impacting the value of their investment.
• The reduction in management fees is a positive for shareholders, potentially increasing net returns.
• The introduction of staking may offer new avenues for yield generation for shareholders, though the allocation structure benefits the Sponsor significantly for income up to 25 basis points.

Next Steps

• Commence staking activities promptly following the effectiveness of the Third Amendment to the Sponsor Agreement and the Sixth Amended and Restated Trust Agreement.
• The Index will be reconstituted and rebalanced quarterly on the first Business Day in March, June, September, and December.

Key Dates

Recommendation

The significant drop in NAV per share and unrealized losses indicate a challenging period for the ETF, driven by crypto market volatility. However, the reduction in management fees and the new staking initiative offer potential future benefits. Given the mixed signals and the inherent volatility of crypto assets, a 'hold' recommendation is prudent, allowing investors to monitor the impact of staking and market recovery.

Keywords

Crypto ETF, Hashdex, Nasdaq CME Crypto Index, Bitcoin, Ethereum, Digital Assets, Form 10-Q, Quarterly Report