Frequently Asked Questions
Cryptoassets and Blockchain
Can I invest in Bitcoin directly?
Through Hashdex, you gain indirect exposure to a fund that tracks the price movement of of the Nasdaq Crypto Index, which seeks to represent the investible crypto asset market. The fund buys and custodies cryptographic tokens on your half, and is comprised of 70% Bitcoin. In summary, Hashdex makes it easy to invest in the crypto asset market so you do not have to spend time and resources figuring out which crypto assets to buy and how to store them securly.
What are cryptoassets and how can they be used?
Crypto assets or "cryptocurrencies" are emerging asset class that includes a variety of tokens issued by underlying blockchain networks. Use cases vary by token, and include store of value, digital payments, and access to a network's resources.
What is bitcoin?
Bitcoin is a digital currency created in January 2009 and is the largest cryptocurrency by market capitalization. It follows the ideas set out in a whitepaper by a pseudonymous creator, Satoshi Nakamoto. Bitcoin offers the promise of lower transaction fees than traditional online payment mechanisms and is operated by a decentralized authority, unlike government-issued currencies.
What is blockchain?
Blockchain is a distributed ledger database. It differs from other database technologies in that blockchains are distributed, decentralized, and data is organized in sequentially valided chuncks (blocks) instead of tables. In a blockchain, every transaction has to be "validated" through consesnsus by the majority of nodes in the network, as opposed to a centralized source of truth. The result are trustless peer-to-peer transactions.
How are new bitcoins created?
New Bitcoins are created through a process called "mining" by network participants. Miners play an important role in the bitcoin ecosystem because they deploy massive computing power to perform essential record-keeping and validation functions. Miners are compensated with new bitcoins, and the number of new bitcoins minted in a block drops by half roughly every four years.
What is a smart contract?
A smart contract is a protocol devised to automatically execute, control, or document events and actions according to the terms of a contract or agreement.
Securtiy, Regulation, and Governance
What is Hashdex?
Founded in 2018, Hashdex is a leading alternative asset manager and its Brazilian subsidiary, Hashdex Gestão de Recursos Ltda, is a manager regulated by CVM. Backed by prominent investors, Hashdex was founded by a team with extensive experience and expertise in finance and technology, and passion for crypto. Our goal is to expand access to crypto assets worldwide by creating the best crypto investment products for the most investor classes at the lowest costs.
Is my crypto safe with Hashdex?
Hashdex's operations is designed for security. All our assets are stored with institutional custodians that follow best-in-class practices such as geographical dispersion, sharding, and deep cold storage. Our technological infrastructure is monitored 24/7 and constantly refined to ensure maximum security around investors' data.
How are the cryptoassets stored?
Hashdex does not have direct access to private keys, which are the encryption tools that grant access to the assets. All keys are held by at least one of our institutional partners. These custodians implement sophisticated processes to prevent attacks by hackers and other criminals. The fund assets are transferred daily to secure storage locations that are disconnected from the internet (cold storage). This means that we do not keep any significant amount of assets on exchanges or in hot wallets that are usual targets for hackers. Asset redemptions with our custodians use multisig technology that requires a multi-step authentication on our side.
Hashdex Nasdaq Crypto Index ETF
What is the Hashdex Nasdaq Crypto Index ETF Fund
The HNCI ETF offers investors a single point of entry into crypto assets. The fund aims to replicate the performance of the Nasdaq Crypto Index, which Hashdex in partnership with Nasdaq to represent the performance of the crypto asset market.
Is the Hashdex Nasdaq Nasdaq Crypto Index ETF regulated?
The fund is listed in the Cayman Islands and is subject to the Cayman Islands Monetary Authority.
Who is the administrator of the Hashdex Nasdaq Nasdaq Crypto Index ETF Fund?
The Hashdex Nasdaq Crypto Assets Index ETF is managed by Hashdex Asset Management, an asset manager registered under the Securities Investment Business Law of the Cayman Islands, subject to regulation by the Cayman Islands Monetary Authority. Hashdex Asset Management is also an Exempt Reporting Advisor under SEC rules and under the US Advisers Act of 1940. Although Hashdex Asset Management is an Exempt Reporting Adviser, its provision of services to the fund is generally not governed by by the 1940 US Advisers Act.
What is the governance structure of Hashdex?
The fund has a Board with mostly independent members. In addition to Bruno Ramos de Sousa (responsible for Legal and Compliance at Hashdex Asset Management), the Fund's Board members are Mark Fagan (Highwater partner) and John D'Agostino (partner of DMS Governance), who have extensive experience with easset management industry. The role of the Board is to oversee the management of the fund and to regularly decide on important matters related to it. The Board follows the company's operations in quaterly meetings. For each meeting, the Board receives periodic reports detailing the company's performance.
Nasdaq Crypto Index and our Funds
What is the NCI?
Co-developed by Hashdex and Nasdaq, the Nasdaq Crypto Index is to designed to measure the performance of the investible crypto market. Using strict eligibility criteria such as market capitalization, institutional custody availability, and minimum market representation, the NCI captures the bulk of the crypto asset market and rebalances quarterly.
How is the NCI fund composition decided?
"NHDAI's constituent assets are defined quarterly based on our eligibility criteria and market capitalization. A cryptocurrency is eligible for inclusion NHDAI if it meets the following criteria: 1) It is traded on a credible exchange; 2) Has instutional-level custody; 3) It is above our minumum required daily traded; and 4) It has a floating price (i.e., its price is not linked to the value of any other asset). NHDAI uses a dynamic selection process in which assets with a minimum representation of 0.25% of the total market capitalization of eligible assets are added to the index. """
How is the weight of each of the fund constituents calculated?
"The weights of the Nasdaq Crypto Index constituents are determined by their market capitalization relative to the crypto market as a whole. The calculation of the market capitalization of each asset uses its price in real time and its outstanding available volume when the index is rebalanced, each quarter. The weights are kept fixed throughout the quarter so that the index can be followed by investors passively."