10-Q: Hashdex Crypto ETF Sees Strong Asset Growth, Fee Reduction

Hashdex Nasdaq CME Crypto Index ETF reports substantial growth in net assets and a reduced management fee, reflecting market performance and strategic adjustments.

Summary

• The Hashdex Nasdaq CME Crypto Index ETF (NCIQ) reported significant growth in net assets, reaching $498,259,005 as of September 30, 2026, up from $153,538,950 in the prior year.
• The ETF's Net Asset Value (NAV) per Common Share was $21.27 as of September 30, 2026, compared to $30.89 a year prior, reflecting market fluctuations.
• Management fees were reduced from 0.50% to 0.25% per annum, effective March 16, 2026.
• Staking income was introduced as a revenue stream, generating $145,585 for the three and nine months ended September 30, 2026.
• The ETF's investment objective is to track the Nasdaq CME Crypto Settlement Price Index (NCIS).

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report, with significant growth in net assets and a reduction in management fees, despite the inherent volatility of crypto assets.

Positives

• Net assets increased significantly to $498,259,005 as of September 30, 2026, from $153,538,950 as of September 30, 2025.
• Management fee reduced from 0.50% to 0.25% per annum, effective March 16, 2026.
• Introduction of staking income, generating $145,585 for the three and nine months ended September 30, 2026.
• The Trust added Hyperliquid (HYPE) as an Index Constituent on September 1, 2026, expanding its diversification.
• The ETF successfully transitioned to the Nasdaq CME Crypto Settlement Price Index (NCIS) on January 20, 2026.

Negatives

• Net Asset Value (NAV) per Common Share decreased to $21.27 as of September 30, 2026, from $30.89 as of September 30, 2025.
• The Trust's largest holding, Bitcoin, represents 73.79% of net assets, creating significant concentration risk.
• The majority of the Common Shares outstanding (90.2%) are held by a single entity, Hashdex Nasdaq Crypto Index Fund, posing a liquidity risk.
• The Trust experienced a net investment loss of $61,167 for the three months ended September 30, 2026.

Risks

• Concentration risk due to the majority of assets being held in Bitcoin.
• Price volatility of crypto assets, including Bitcoin, Ethereum, XRP, Solana, and others, can adversely affect the Trust's net asset value.
• Regulatory uncertainty in the crypto asset markets.
• Potential for market disruption due to government actions or platform issues.
• Liquidity risk due to a significant portion of shares being held by a single entity.
• The Index Constituents may experience pronounced and swift price changes, leading to potential price discrepancies between the time of order placement and execution.

Future Outlook

The Trust aims to align its daily NAV changes with the daily price changes of the Nasdaq CME Crypto Settlement Price Index (NCIS), minus operational expenses. The addition of Hyperliquid as an Index Constituent and the commencement of staking activities are key developments. The Trust's performance will continue to be influenced by the volatility of the crypto asset market and the performance of the Index Constituents.

Management Comments

• The Trust's investment objective is to align the daily changes in the net asset value (NAV) of the Common Shares with the daily price changes of the Index, minus operational expenses and liabilities.
• The Sponsor will employ a passive investment strategy intended to track the changes in the Index, regardless of its direction.
• The Trust does not purchase or sell digital assets other than in connection with the creation and redemption of blocks of 10,000 Common Shares called Baskets.

Industry Context

StockSavvy.ai notes that the crypto ETF market continues to evolve, with products like the Hashdex Nasdaq CME Crypto Index ETF aiming to provide regulated exposure to digital assets. The recent addition of staking income and a fee reduction are competitive moves within this dynamic sector.

Comparison to Industry Standards

• The management fee of 0.25% is competitive within the crypto ETF space, especially after the reduction from 0.50%.
• The inclusion of staking income as a revenue source is a developing trend in crypto-focused funds, aiming to offset management fees and enhance returns.
• The concentration risk in Bitcoin (73.79%) is typical for broad crypto index funds, though some competitors may offer more diversified or specialized crypto exposure.

Legal Proceedings

• As of September 30, 2026, the Trust was not subject to any material legal proceedings.

Related Party Transactions

• The Sponsor, Hashdex Asset Management Ltd., provides management services and receives a management fee.
• The Sponsor receives an allocation of Net Staking Income, with 100% of income up to 25 basis points of NAV allocated to the Sponsor Share, and any excess split 40% to the Sponsor and 60% to the Trust.
• As of September 30, 2026, the Trust had a liability of $100,574 for Sponsor Share Allocation earned but not yet distributed.
• As of September 30, 2026, the Trust had a liability of $97,760 to the Sponsor for the September Management Fee.

Stakeholder Impact

• Shareholders experienced a decrease in NAV per share, impacting the value of their investment.
• The reduction in management fees benefits shareholders by increasing net returns.
• The introduction of staking income may provide a modest offset to expenses and potentially enhance returns for shareholders.
• Concentration of ownership by the Sponsor's fund could impact market liquidity for common shares.

Next Steps

• Continue to track the Nasdaq CME Crypto Settlement Price Index (NCIS).
• Monitor the performance of Index Constituents, including the newly added Hyperliquid.
• Evaluate the effectiveness and potential expansion of staking activities.
• Manage liquidity risks associated with concentrated share ownership.

Key Dates

Recommendation

The ETF's performance is directly tied to the volatile crypto market, as evidenced by the decline in NAV per share. While the fee reduction and staking income are positive, the inherent risks and recent performance suggest a cautious 'hold' approach until market conditions stabilize or the ETF demonstrates consistent outperformance relative to its index.

Keywords

Crypto ETF, Digital Assets, Bitcoin, Ethereum, Nasdaq CME Crypto Index, NCIQ, Staking Income, Index Tracking