Nasdaq Adds XRP, SOL, ADA, and XLM to Expanded Crypto Index

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The world of cryptocurrency continues to evolve rapidly, and institutional adoption is accelerating. A major development in this space came on June 2, 2024, when Nasdaq filed a proposed rule change with the U.S. Securities and Exchange Commission (SEC) under Rule 19b-4. This filing signals a significant expansion of its digital asset benchmark, integrating four prominent altcoins: XRP, Solana (SOL), Cardano (ADA), and Stellar Lumens (XLM).

This move reflects Nasdaq’s growing recognition of the maturing crypto market and the need for broader, more representative indices that go beyond Bitcoin and Ethereum. The proposed change aims to enhance the Hashdex Nasdaq Crypto Index US ETF (NCIQ) by shifting its underlying benchmark from the current Nasdaq Crypto US Settlement Price Index (NCIUS) to the more comprehensive Nasdaq Crypto Index (NCI).

Expanding the Benchmark for Greater Market Representation

The NCIUS was previously limited in scope, primarily tracking Bitcoin (BTC) and Ethereum (ETH). While these two remain dominant players, they don’t fully capture the innovation and diversity present across the blockchain ecosystem. By incorporating XRP, SOL, ADA, and XLM, Nasdaq is acknowledging the growing importance and market influence of high-performance blockchains and utility-focused cryptocurrencies.

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The updated NCI now includes a total of nine cryptocurrencies:

This diversified composition allows the index to better reflect the overall health and trends of the broader digital asset market, offering investors a more holistic view of sector performance.

Bridging the Gap Between Index and ETF Holdings

Despite tracking an index with six assets, the Hashdex ETF currently only holds positions in BTC and ETH due to regulatory constraints imposed by the SEC. This creates what’s known as a tracking error—a divergence between the ETF’s performance and that of its benchmark index.

To mitigate this risk, Hashdex employs a sampling mechanism, strategically allocating capital to BTC and ETH in a way that approximates the behavior of the full index. However, this method cannot guarantee perfect alignment, especially during periods when altcoins outperform or underperform significantly.

If the SEC approves the proposed rule change, the ETF will be allowed to invest directly in all nine constituents of the NCI. This would eliminate tracking error concerns and enable true passive exposure to a diversified basket of leading digital assets.

Regulatory Timeline and Market Implications

The SEC is expected to make a final determination on the proposal by November 2, 2025. This timeline places the decision at a pivotal moment in the evolution of crypto regulation in the United States.

Approval would represent a landmark shift—potentially opening the door for more diversified, altcoin-inclusive ETFs in the future. It could also encourage other financial institutions to explore similar products, further legitimizing digital assets as part of mainstream investment portfolios.

Market analysts view this development as a strong signal of growing institutional confidence in cryptocurrencies beyond Bitcoin. Including projects like Solana and Cardano—known for their scalability and smart contract capabilities—suggests a recognition of technological merit alongside market capitalization.

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Frequently Asked Questions

Q: Why is Nasdaq adding XRP, SOL, ADA, and XLM to its crypto index?
A: These altcoins represent some of the largest and most technologically advanced blockchains in the ecosystem. Their inclusion improves the index’s ability to reflect broader market trends beyond just Bitcoin and Ethereum.

Q: Can the Hashdex ETF currently invest in all coins listed in the Nasdaq Crypto Index?
A: No. Due to current SEC regulations, the ETF only holds Bitcoin and Ethereum. It uses a sampling strategy to approximate the performance of the full index but cannot fully replicate it without regulatory approval.

Q: What is tracking error in crypto ETFs?
A: Tracking error occurs when an ETF’s returns deviate from those of its benchmark index. In this case, it arises because the ETF tracks a nine-asset index but only invests in two assets.

Q: When will the SEC decide on Nasdaq’s proposal?
A: The SEC is scheduled to make its final determination by November 2, 2025. This decision will determine whether U.S.-listed crypto ETFs can expand their holdings beyond BTC and ETH.

Q: How many cryptocurrencies are in the Nasdaq Crypto Index (NCI)?
A: The NCI currently includes nine digital assets: BTC, ETH, XRP, SOL, ADA, XLM, LINK, LTC, and UNI.

Q: What impact could SEC approval have on the crypto market?
A: Approval could pave the way for more diversified crypto ETFs, increase institutional participation, boost investor confidence in altcoins, and enhance liquidity across multiple blockchain networks.

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Looking Ahead: A New Era for Crypto Investing?

Nasdaq’s move underscores a clear trend: digital assets are no longer niche investments. As regulatory frameworks adapt and financial infrastructure evolves, we’re likely to see more sophisticated products that offer diversified exposure to blockchain innovation.

The inclusion of XRP, SOL, ADA, and XLM isn’t just symbolic—it’s a strategic step toward building indices that accurately mirror the dynamic nature of the crypto economy. For investors, this means greater transparency, improved risk management, and new opportunities for long-term growth.

While the final decision rests with the SEC, the momentum behind broader crypto adoption continues to build. Whether through ETFs, indices, or decentralized finance platforms, the future of investing is becoming increasingly digital—and increasingly accessible.