The world’s second-largest stock exchange has launched an ambitious drive to see the struggling crypto market reverse its dwindling market fortunes.
Nasdaq Plans to Establish Digital Assets Units
Bloomberg reported that the new crypto unit would cater to institutional investors’ demand for digital assets. Moreover, Nasdaq officials noted that the new department was established in response to institutional interest in cryptocurrency.
Tal Cohen, Nasdaq’s executive president, revealed that the unit would provide custody offerings for Bitcoin (BTC) and Ether (ETH).
Cohen added that:
“Custody is essential.”With custody in place, we can start thinking about creating other solutions and consider how to support emerging markets.”
Furthermore, the head of Nasdaq’s digital assets unit, Ira Auerbach, revealed that the company has a crypto-centric vision.
Auerbach noted that Nasdaq believes institutional players will spearhead the next cryptocurrency adoption. She added that Nasdaq is best suited to onboard brands for the crypto industry.
Wall Street Players Brace for Crypto Expansion
Meanwhile, Nasdaq has not been the only traditional financial player to forecast crypto’s entry into the mainstream. Some Wall Street giants, like Fidelity Digital Assets, BlockRock, Citadel Securities, and others, have crypto strategies.
For its part, BlackRock has teamed up with U.S.-based crypto exchange, Coinbase after previously offering Bitcoin investment products. The partnership will allow investors to trade Bitcoin on the BlackRock platform easily.
Furthermore, there is also another upcoming exchange, EDX Market. The new EDX Market will soon begin low-fee trading for non-security tokens.
Meanwhile, the new product is expected to be available before the end of the year. It is open to both retail and institutional traders through approved service providers.
According to the CEO of Valkyrie Funds, Leah Wald, institutional players’ entry into the crypto industry is a big deal for the nascent sector. Wald added that despite the spiraling market prices, institutions’ interest in cryptocurrency is waning.
However, according to The Financial Times, institutional investors’ activities may negatively affect the price of digital assets. Citing historical figures, the analytics firm points out that the big players will trigger market movement once they dump their crypto funds in response to broader economic pressure.
Crypto as an Alternative Investment Tool
According to GlobaData’s 2022 Financial Services Consumer Survey, consumers worldwide are attracted to cryptocurrencies. The study shows that the desire to hold cryptocurrency as an investment fuels people’s interest.
Accordingly, 77.4% of the respondents revealed that the motivation to earn profits attracts them to cryptocurrency. On the other hand, 18.5% disclosed that they use crypto as a payment system. Since the COVID-19 pandemic, the digital asset industry has gained traction among individuals and corporations.
Crypto hedge funds appear to account for the bulk of crypto exposure. However, due to its high volatility, they limit others’ exposure to the crypto market.
Meanwhile, hedge funds’ market-neutral approach seems to be the best strategy to generate profits by utilizing derivative products.