Nasdaq Crypto Index Adds XRP, SOL, ADA, and XLM as SEC Reviews ETF Expansion Request

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The Nasdaq Crypto Index (NCI) has officially expanded its digital asset lineup, marking a pivotal development in the evolution of regulated crypto investment products. The index now includes nine major cryptocurrencies, up from its original five, with the recent addition of XRP, SOL, ADA, and XLM. This expansion reflects growing institutional demand for broader exposure to high-performance altcoins beyond just Bitcoin and Ethereum.

However, a key regulatory hurdle remains: the U.S. Securities and Exchange Commission (SEC) has yet to approve changes that would allow the Hashdex Nasdaq Crypto Index US ETF (NCIQ) — the only U.S.-listed ETF tracking this index — to include these new assets in its portfolio.

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Expanded Index Composition Reflects Market Maturity

The updated Nasdaq Crypto Index now tracks the following nine digital assets:

This expansion underscores a maturing crypto ecosystem where select altcoins have demonstrated sustained market relevance, liquidity, and adoption. Assets like Solana (SOL) and XRP have shown strong performance and real-world utility in payments and decentralized applications, making them natural candidates for inclusion in institutional-grade indexes.

Previously, the index was limited to BTC, ETH, LTC, LINK, and UNI. The addition of four more assets aims to enhance diversification and better reflect the broader cryptocurrency market’s structure and investor behavior.

Regulatory Hurdle: SEC Decision Looms on ETF Rule Change

Despite the index update, the Hashdex NCIQ ETF cannot yet invest directly in XRP, SOL, ADA, or XLM due to current SEC regulations. As of now, the ETF is restricted to direct investments only in Bitcoin and Ethereum, the two cryptocurrencies the SEC has implicitly recognized as non-securities through prior approvals of spot ETFs.

To bridge this gap, Nasdaq ISE, LLC filed a proposed rule change with the SEC on March 7, 2025. If approved, the rule change would permit the NCIQ ETF to realign its holdings with the expanded index by investing directly in the additional cryptocurrencies.

The SEC has set a deadline of November 2, 2025, to issue a final decision. Approval would mark a significant regulatory shift — potentially opening the door for more diversified crypto ETFs in the U.S. market.

Until then, Hashdex must rely on indirect methods to mirror the index’s performance.

Tracking the Index Without Full Access: The Sampling Strategy

In the absence of full investment flexibility, Hashdex is employing a sampling strategy to approximate the returns of the expanded Nasdaq Crypto Index. This involves adjusting allocations between Bitcoin and Ethereum — increasing or decreasing exposure based on market movements — to simulate the overall behavior of the nine-asset index.

While this approach allows the ETF to remain functional and responsive, it introduces tracking error risk. That is, the ETF’s actual returns may diverge from those of the index it seeks to follow, especially during periods of high volatility or when non-BTC/ETH assets outperform significantly.

For investors seeking true diversification across top-tier altcoins, this limitation highlights the urgent need for regulatory clarity and expanded investment permissions.

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What This Means for Crypto Investors

The expansion of the Nasdaq Crypto Index represents more than just a technical update — it signals growing confidence in the long-term viability of select altcoins. By including assets like Cardano (ADA) and Stellar (XLM) — both known for their focus on financial inclusion and cross-border payments — Nasdaq is acknowledging the functional diversity within the crypto space.

For retail and institutional investors alike, a fully aligned ETF would offer:

A successful approval could also encourage other asset managers to pursue similar multi-asset crypto ETFs, accelerating mainstream adoption.

International Precedent: Hashdex’s XRP ETF Approval in Brazil

While U.S. regulators deliberate, Hashdex has already made strides abroad. Earlier in 2025, Brazil’s securities regulator (CVM) approved the launch of the world’s first XRP spot ETF — the Hashdex Nasdaq XRP Index Fund. This product will be listed on the B3 stock exchange, giving Brazilian investors direct exposure to XRP’s price movements.

This milestone is particularly significant given the ongoing legal uncertainties around XRP in the U.S., where Ripple Labs continues to navigate litigation with the SEC. Brazil’s approval suggests that global regulators are increasingly willing to treat certain altcoins as legitimate financial assets under appropriate frameworks.

It also positions Hashdex as a leader in cross-border crypto finance innovation — one that may influence future U.S. policy decisions.

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Frequently Asked Questions (FAQ)

Why did Nasdaq add XRP, SOL, ADA, and XLM to its crypto index?

These four assets were selected based on criteria including market capitalization, liquidity, trading volume, security standards, and real-world adoption. Their inclusion reflects their established presence in the digital asset ecosystem and growing investor interest.

Can I currently invest in all nine assets through the NCIQ ETF?

No. While the Nasdaq Crypto Index now includes nine assets, the Hashdex NCIQ ETF is still restricted by SEC rules to holding only Bitcoin and Ethereum directly. Full alignment depends on pending regulatory approval.

What is tracking error, and why does it matter?

Tracking error measures how closely an ETF follows its benchmark index. A higher tracking error means the fund’s performance deviates more from the index — which can reduce investment accuracy and increase risk for passive investors.

When will the SEC decide on the ETF rule change?

The SEC has until November 2, 2025, to make a final determination on Nasdaq’s proposed rule change. A favorable decision would allow the NCIQ ETF to invest in all nine index components.

Is XRP considered a security in the U.S.?

The legal status of XRP remains partially unresolved. In a 2023 ruling, a U.S. court determined that XRP is not inherently a security when sold to retail investors, but may be when sold institutionally. The SEC has appealed aspects of this decision, creating ongoing uncertainty.

Could other altcoins be added in the future?

Yes. The Nasdaq Crypto Index uses a transparent methodology that allows for periodic reviews and updates. Assets like Polkadot (DOT), Avalanche (AVAX), or Cosmos (ATOM) could be considered if they meet evolving eligibility standards.

Final Thoughts: A Step Toward Broader Crypto Adoption

The expansion of the Nasdaq Crypto Index is a forward-looking move that aligns with global trends toward diversified digital asset investing. With key players like Hashdex pushing boundaries both in the U.S. and internationally, the stage is set for a new era of accessible, compliant, and diversified crypto investment vehicles.

As regulators weigh innovation against investor protection, decisions like the upcoming SEC ruling on NCIQ will play a crucial role in shaping the future of crypto finance — not just in America, but worldwide.

Keywords: Nasdaq Crypto Index, XRP, SOL, ADA, XLM, crypto ETF, SEC approval, Hashdex NCIQ