For over a year, trading Hashdex's diversified crypto ETF was like riding an amusement park without seatbelts. Investors could speculate, but if the market fell, there was little protection. That's now changed.
Options on the Hashdex Nasdaq CME Crypto Index ETF (NCIQ) went live on Nasdaq on Monday, providing investors a way to hedge, generate income and manage risk on 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), , chainlink and stellar (XLM) along with the U.S. dollar and other assets. The fund has nearly $100 million in assets under management.
Until now, institutions could buy single asset ETFs like BlackRock's bitcoin or ether ETFs and hedge their risks using options tied to these funds. If they wanted broad exposure across multiple tokens, they could so so via the Hashdex ETF, but without the safety net.
Advisers couldn’t set up strategies to earn extra income from the ETF, or protect against big losses, without actually selling the investment. These kinds of risk-management tools are standard for institutions and often a prerequisite for them to invest at 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 yield on holdings. Some risk management frameworks require defined-outcome structures before any allocation can be approved."
With options, institutions can hedge without liquidating the base ETF position, set up yield-generating strategies and other bets that profit from volatility and time, rather than just price direction, and enter positions with a clear maximum loss, satisfying 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-outcome ETFs, which cap upside while guaranteeing a floor on the downside.
Options are derivative contracts that give the right to buy or sell the underlying asset such as a stock or crypto token at a preset price at a later date. A call option gives the right to buy and represents a bullish market bet. A put option offers 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 daily volumes worth several hundred million dollars and quarterly expiries worth billions, which can sometimes move the spot price.
The ETF options market is catching up quickly. Options tied to BlackRock's bitcoin ETF (IBIT) now trade at volumes approaching those of bitcoin options on Deribit.