Nasdaq looks at crypto trading as it pushes into digital assets

Nasdaq is expanding into the crypto market in a sign that the world’s biggest financial institutions are undeterred by the collapse in digital asset prices.

A US exchange operator announced on Tuesday that it will launch a digital assets service business that will provide institutional investors with protection against crypto tokens. The New York firm, which handles billions of daily stock deals in stocks such as Apple and Tesla, said it was considering trading digital assets.

His push comes on the heels of other big Wall Street names also promoting crypto services, shrugging off a tumultuous summer in which popular crypto tokens like bitcoin and ethereum plummeted in value and the failed terra stablecoin project led to financial ruin. Investors.

The crypto market cap has also dropped from over $3tn to $1tn, which has hurt once-famous crypto companies like Celsius and Three Arrows Capital.

Asset management group BlackRock has announced the launch of a bitcoin private trust site available to institutional clients and has linked its trading network to Coinbase, a crypto exchange. Fidelity also said it will allow investors to add cryptocurrencies to their portfolios in 401(k) retirement plans.

Nasdaq’s handling of digital assets could lay the foundation for future crypto trading services, he said.

“This is an evolution that Nasdaq is seeing,” said Ira Auerbach, Nasdaq’s senior vice president and new head of the division, Nasdaq Digital Assets.

Auerbach, a former executive at digital exchange Gemini, said the deal is definitely below that line. We believe that protection is the foundation.

He said the market’s interest in blockchain technology, which underlies many digital assets, has continued despite the crash. “Distributed ledger technology is a game-changer for business, finance and the world at large,” he said.

However, the market for holding crypto assets is becoming increasingly competitive. Unlike traditional assets such as stocks or futures, the owners of the assets are as responsible for protecting the assets as they are for protecting their money. One Nasdaq competitor, the Intercontinental Exchange, has been unable to advance in its proprietary operations.

Auerbach said Nasdaq had “absolutely unrivaled” institutional knowledge, and talked to market participants about “institutional pain points” involved in the crypto space. “We think we’re in a unique position and in that position, both in conservation and ultimately in other services, we have the right to win on top of that,” he said.

Nasdaq said it could use its other capital markets services, such as surveillance, market abuse and financial crimes software widely used by traditional financial institutions. Last year, there was a record $14 billion worth of cryptocurrencies used for illegal activity, more than doubling by 2020, according to analytics firm Chinalysis.

“The problem is not going away, if anything, it’s increasing,” said Valerie Bannert-Turner, Nasdaq’s senior vice president of anti-financial crime technology.

Leave a Comment