This Bermuda-based ETF illustrates exchange giant Nasdaq's broader crypto ambitions

Quick Take

  • A crypto ETF begins trading on the Bermuda Stock Exchange on Tuesday.
  • The product is based on Nasdaq’s Crypto Index.
  • The launch itself highlights Nasdaq’s ambitions to power crypto-tied products.

From S&P Global to Cboe Global Markets, Wall Street firms are looking to launch index products that will serve as the basis for a crypto exchange-traded fund (ETF).

As of this morning, Nasdaq can claim that achievement. Nasdaq announced the debut of the Hashdex Nasdaq Crypto Index ETF, which is based on an index devised by the stock exchange operator.

The ETF will trade on the Bermuda Stock Exchange, available to a smaller pool of investors than it might have been in the United States. Still, the ETF's release highlights the pace of progress for such products and the ambitions of data firms hoping to provide the informational foundations for them. Both S&P Global to Cboe announced their intention to launch crypto indexes that might one day underpin such products.

As for Nasdaq, the firm explored exactly how it might break into the crypto index market for several years before it began the development of the Nasdaq Crypto Index in July 2020.

In an interview with The Block, Sean Wasserman, global head of index and advisor solutions, said that Nasdaq wanted to create a benchmark for the industry that could "meet the needs of growing institutional interest."


The Nasdaq Crypto Index was developed alongside Hashdex, which licenses the index across its funds offered in Brazil, according to Wasserman. Wasserman said Nasdaq wanted the index to uniquely capture the most liquid and most favorable crypto assets for large institutions. As such, Nasdaq outlined the key criteria required for a cryptocurrency – or constituent, in ETF terminology– to be included.

According to Wasserman, constituents have to trade on "core" exchanges and custodians with ample liquidity and volumes. Those core exchanges include Coinbase, Bistamp, Gemini and Kraken. The list of core custodians includes BitGo, Coinbase, and Fidelity. 

"To be considered for entry to the Index at any index reconstitution, an asset must have a median daily trading volume in the USD pair conducted across all core exchanges that is no less than 0.5% of the cryptocurrency asset that has the highest median daily trading volume," a FAQ sheet of the index notes. 


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There's also a board overseeing development that spans Nasdaq's legal, product, and trading units. Leveraging the outlined methodology and criteria of the index, the board will re-constitute the makeup of the index. 

That's unique from other indexes that include constituents simply based on weighted market capitalization. Currently, the index's constituents include six cryptocurrencies: Bitcoin, Ethereum Litecoin, Bitcoin Cash, Chainlink, and Stellar Lumens. 

Global ambitions

Nasdaq has global ambitions for its Nasdaq Crypto Index. Similar to how Nasdaq approaches its exchange technology business, which powers venues across the globe, Wasserman said the index could serve as the basis for funds in various geographies and client types.

"It's early days," Wasserman said, declining to comment on other firms lining up to build products on the index. Wasserman said he anticipates issuers will leverage the index for ETF and private placement products. 

"We want to establish it as the de facto index for institutional investors looking to access the market," he said. "ETFs, OTC derivatives, as institutions' appetites increase, we want the Nasdaq Crypto Index to serve as the bedrock for all of these investment products."

At this early stage, the revenue opportunity will be small for Nasdaq, which is taking a partnership approach and splitting profits on the new ETF with Hashdex. 

"The more assets [partners] raise, the more revenue we are able to generate," he told The Block. 

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

About Author

Frank Chaparro is the Editor At Large at The Block. Chaparro started his career at Business Insider, where he specialized in the intersection of digital assets and Wall Street, market structure, and financial technology. Soon after joining Business Insider out of Fordham University, Chaparro was interviewing top finance and tech executives, including billionaire Mark Cuban, “Flash Boys” star Brad Katsuyama, Cboe Global Markets CEO Ed Tilly, and New York Stock Exchange President Tom Farley. In 2018, he become a sought after reporter in the crypto world, interviewing luminaries such as Tyler Winklevoss, the cofounder of Gemini, Jeremy Allaire, the CEO of Circle, and Fundstrat head Tom Lee. He runs his own podcast The Scoop and writes a biweekly eponymous newsletter. He leads special projects, including The Block's flagship podcast, The Scoop. Prior to The Block, he held roles at Business Insider, NPR, and Nasdaq. For inquiries or tips, email [email protected].