Nasdaq Scales Up Crypto Ambitions By Introducing Custody Service For Institutional Players

Nasdaq Scales Up Crypto Ambitions By Introducing Custody Service For Institutional Players

September 21, 2022

Nasdaq is preparing to launch its crypto custody service to capitalize on the rising interest in crypto among institutional clients.

Nasdaq To Start Crypto Custody Services

Nasdaq is delving deeper into crypto.

According to a press release on Tuesday, the second-biggest stock exchange in the world is betting big on crypto in hopes of cashing in on the increasing demand from institutional-grade crypto investors amid the ongoing bear market.

Nasdaq Digital Assets will first provide custody services for Bitcoin and Ethereum to institutional clients such as hedge funds. Nasdaq has tapped former Gemini Prime global head Ira Auerbach to lead the new unit.

Tal Cohen, Nasdaq’s Executive Vice President and head of North American markets, commented on the growth of the digital assets space, asserting that the exchange is well-positioned to boost adoption further. Cohen said:

“With our trusted brand and strong track record as a technology provider for the global capital markets, Nasdaq is uniquely placed to address industry pain points by improving liquidity, scalability, and resiliency, with the goal to engender greater trust and confidence in the digital assets ecosystem.”

Nasdaq will effectively compete with crypto-native custodians like Coinbase, BitGo, and Anchorage Digital. It will also rival BNY Mellon and State Street, two behemoths of the legacy finance sector that have already dipped their toes into the crypto custody niche.

As a major American stock exchange operator, Nasdaq’s endorsement of bitcoin and ethereum custody is a significant step forward in adoption.

Institutional Investors Are Here

As the crypto winter grew more frigid in 2022, bitcoin and other cryptocurrencies retraced by more than 60% from late last year’s all-time highs. Nonetheless, bitcoin has continued to draw the interest of institutional players on Wall Street.

With the lack of a spot Bitcoin exchange-traded fund (ETF), Grayscale has been closing the gap by offering institutional clients a regulated way of getting crypto exposure through its trusts.

Furthermore, investment management firms, including BlackRock, Goldman Sachs, and Morgan Stanley, have launched crypto-related products for their clients. This indicates that traditional financial institutions finally realize bitcoin is too big to be ignored — and are embracing the asset instead.

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