Nasdaq Inc. is making its first major push into crypto, as the second-largest stock exchange prepares to capitalize on increasing appetite for digital currencies among big-money investors.
A new group dedicated to digital assets will initially offer custody services for Bitcoin and Ether to institutional investors.
Nasdaq hired Ira Auerbach, who ran prime broker services at crypto exchange Gemini, to head up the new Nasdaq Digital Assets unit.
Wall Street’s biggest firms are deepening their involvement as institutional investor interest persists despite a downturn that cost jobs and depressed prices.
BlackRock Inc. partnered with Coinbase Global Inc. to make it easier for investors to trade Bitcoin and shortly after offered its first investment product directly in the token.
EDX Markets, a new exchange backed by Charles Schwab Corp., Fidelity Digital Assets, Citadel Securities and Virtu Financial among others, will start trading some tokens this year.
Nasdaq would be competing with crypto firms such as Coinbase, Anchorage Digital and BitGo.
“Custody is foundational,” Cohen said in an interview. “Off the back of custody, we can start to develop other solutions, offer execution services, liquidity services, and think about how we support new markets.”
While Nasdaq has no immediate plans to launch a crypto exchange, it will evaluate the opportunity based on the regulatory environment and competitive landscape.
The company also outsources its own software to crypto players, including surveillance and trading tools. It already provides matching engine technology to crypto exchanges such as Bitstamp.
But still, Nasdaq’s overall approach to the space has been more cautious because of questions around regulation.
The digital asset team is looking to build internally and hire externally, reaching 40 people by year-end,.
For Institutions
This gradual, soft and indirect approaches from TradiFi institutions is very natural and smart.
But this institutional involvement may not be benefitial for healthy and unexpected revolutionay crypto development.
Institutions may try to take over the crypto world cooperating with authorities and having necessary tools to get another generation cash cow.
One of best picture for institutions would be to stay with revolutionary players cooperating each other and sharing the benefit.
Institutions should not have big ambition to be a leader in this this new digital world for their own benefit.
It would collapse so muich of it and make this revolution slow.