For over a year, trading Hashdex’s diversified crypto ETF was like riding an amusement park without seat belts. Investors could speculate, but if the market fell, there was little protection. That has now changed.
Options on Hashdex Nasdaq CME Crypto Index ETF (NCIQ) went live on Nasdaq on Monday, giving investors a way to hedge, generate income and manage risk in a product that offers diversified crypto exposure, not just bitcoin or ether (ETH), for the first time.
NCIQ, which debuted in February 2025, provides exposure to a broad, market-cap-weighted basket of digital assets based on the Nasdaq CME Crypto Index (NCI). As of Monday, it held bitcoin, ether, XRP (XRP), solana (SOL), chain link and stars (XLM) along with the US dollar and other assets. The fund has nearly $100 million in assets under management.
Why the launch of opportunities is essential
Until now, institutions could buy single-asset ETFs like BlackRock’s bitcoin or ether ETFs and hedge their risks using options attached to those funds. If they wanted broad exposure across multiple tokens, they could via the Hashdex ETF, but without the safety net.
Advisors could not strategize to earn extra income from the ETF or protect against large losses without actually selling the investment. These kinds of risk management tools are standard for institutions and often a prerequisite for them to be able to invest on a large scale.
“Some institutions cannot take a position they cannot also hedge,” Hashdex said in the official announcement. “Some advisor models require the ability to generate returns on holdings. Some risk management frameworks require defined outcome structures before any allocation can be approved.”
With options, institutions can hedge without liquidating the underlying ETF position, set up return-generating strategies and other bets that profit from volatility and time rather than just price direction, and enter positions with a clear maximum loss that satisfies risk committees and compliance frameworks.
According to Hasdex, the implications go beyond these usual strategies, setting the stage for more sophisticated TradFi-like structured products such as capital-protected crypto-notes and defined-income ETFs, which cap the upside while guaranteeing a bottom on the downside.
Booming options industry
Options are derivative contracts that give the right to buy or sell the underlying asset such as a stock or crypto token at a predetermined price at a later date. A call option gives the right to buy and represents a bullish market bet. A put option provides protection against price declines.
The crypto options market has seen explosive growth over the past five years, with bitcoin and ether contracts listed on Deribit registering hundreds of millions of dollars worth of daily volume and billions worth of quarterly expirations, which can sometimes move the spot price.
The ETF options market is quickly catching up. Options linked to BlackRock’s bitcoin ETF (IBIT) are now trading at volumes approaching those of bitcoin options on Deribit.
