For over a year, trading Hashdex’s diversified crypto ETF was like riding in an amusement park without a seat belt. Investors could speculate, but if the market fell, they had little protection. This has now changed.
Options on the Hashdex Nasdaq CME Crypto Index ETF (NCIQ) went live on Nasdaq on Monday, providing investors with a way to hedge, generate income and manage risk on a product that provides diversified exposure to crypto, 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). On Monday, he held Bitcoin, Ether, XRP (XRP), Solana (SOL), chain link and stellar (XLM) with the US dollar and other assets. The fund manages nearly $100 million in assets.
Why is launching options crucial
Until now, institutions could buy single-asset ETFs like BlackRock’s Bitcoin or Ether ETFs and hedge their risks using options linked to those funds. If they wanted broad exposure across multiple tokens, they could do so through the Hashdex ETF, but without a safety net.
Advisors could not implement strategies to earn additional income from the ETF, or protect against significant losses, without actually selling the investment. These types of risk management tools are standard for institutions and are often a prerequisite for investing at scale.
“Some institutions cannot take a position that they also cannot hedge,” Hashdex said in the official statement. “Some advisor models require the ability to generate returns on assets. Some risk management frameworks require defined outcome structures before an allocation can be approved.”
With options, institutions can hedge without liquidating the ETF’s base position, implement yield-generating strategies and other bets that take advantage of volatility and time, rather than just price direction, and take positions with a clear maximum loss, satisfying risk committees and compliance frameworks.
According to Hasdex, the implications go beyond these usual strategies, paving the way for more sophisticated TradFi-style structured products, such as principal-protected crypto notes and defined-outcome ETFs, which cap the upside while ensuring a floor on the downside.
A 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 predefined price at a future date. A call option gives the right to buy and represents a bull 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 seeing daily volumes worth hundreds of millions of dollars and quarterly expirations worth billions, which can sometimes swing the spot price.
The ETF options market is quickly catching up. Options linked to BlackRock’s Bitcoin ETF (IBIT) are now trading at volumes close to those of Bitcoin options on Deribit.
