Nasdaq’s Strategy for Crypto Custody Services
CryptoChipy has gathered credible sources confirming that Nasdaq plans to initially offer crypto custody services for Bitcoin and Ether to institutional investors, including hedge funds. Although the institutional bitcoin custody market is perceived as crowded, Nasdaq is determined to enter the cryptocurrency space. It is believed that Nasdaq is waiting for approval to officially enter the cryptocurrency custodian market.
As part of its strategy, Nasdaq is launching a new subsidiary focused on cryptocurrencies, which will align with its goal of providing crypto custody services. The subsidiary, named Nasdaq Digital Assets, will primarily offer custody services to institutional investors for Bitcoin (BTC) and Ethereum (ETH). Tal Cohen, Nasdaq Inc.’s executive vice president and head of North American markets, confirmed that the new subsidiary would cater to institutional investors.
Nasdaq has recruited Ira Auerbach, the former head of prime broker services at the Gemini exchange, to lead its Digital Asset subsidiary. Auerbach believes that institutional adoption will drive the next wave of financial innovation and strongly supports the idea that cryptocurrency is a perfect market for Nasdaq to build trust in.
By offering crypto custody services, Nasdaq is entering direct competition with more established players in the cryptocurrency market, including crypto exchange Coinbase, custodians like Anchorage Digital and BitGo, and traditional financial institutions such as BNY Mellon and State Street.
Nasdaq’s Previous Experience with Crypto
Nasdaq’s involvement with the crypto market dates back to at least 2018. The exchange has provided market surveillance technologies to various crypto exchanges, including Coinbase, BitGo, and Gemini—some of its direct competitors in the crypto space.
In February 2022, Nasdaq launched the Hashdex Nasdaq Crypto Index ETF, which is based on its proprietary index, potentially created in collaboration with a Brazilian firm, based on the .com.br domain used on its official website.
Earlier in May 2022, Nasdaq formed a partnership with the Brazilian firm XP to build a digital asset exchange named XTAGE. Roland Chai, an executive at Nasdaq, stated that the partnership offered new opportunities for investors and organizations. XP later announced that the digital asset exchange would launch in 2022.
In its competition with companies like Coinbase and FTX, Nasdaq has decided to offer technological solutions to market participants instead of running its own crypto trading platform.
The Growing Adoption of Crypto
BitMEX CEO Alexander H?ptner forecasted that Ethereum’s transition to Proof of Stake would attract institutional investors. Institutions are increasingly concerned with the environmental impact and efficiency of crypto, and Henrik Andersson of Apollo Capital shares the view that institutions will no longer adopt a passive stance toward crypto. He believes that missing out on crypto investments could soon become a career risk.
Wall Street firms like BlackRock partnered with Coinbase in August to offer Bitcoin trading and a Bitcoin Investment Product. JP Morgan Chase has already developed a blockchain-based trading platform, with Goldman Sachs expected to follow suit. Other firms like Charles Schwab and Fidelity are backing the new exchange, EDX Markets, set to launch later in the year.
CryptoChipy believes Nasdaq’s move to provide crypto custody services is aimed at tapping into the emerging asset class. Banks like Barclays are also funding custody service providers, with BNP Paribas joining forces with the Swiss digital asset safekeeping firm Metaco for a crypto custody partnership.
Though the crypto custody business may seem crowded, it remains highly profitable due to the large volumes involved and relatively low operational demands. Institutional custody providers often secure multi-billion-dollar valuations.
Nasdaq’s push into the crypto custody space aligns with its goal of being a service provider rather than a platform for crypto trading. It also highlights the growing influence of cryptocurrency in the financial markets. Nasdaq’s involvement is expected to pave the way for other institutions to follow suit. However, it is possible to handle your own crypto assets securely. Here’s how.
How to Safeguard Your Crypto Assets
First, you need a reliable crypto exchange to purchase digital assets. We recommend Crypto.com Exchange and FTX, so you can start by signing up for FTX if you prefer trading via mobile, or choose Crypto.com Exchange if you prefer a simpler experience.
The next step is to move your assets to a hardware wallet, ensuring they are offline and safe from theft. It is important to store the password to access the device securely. While Trezor, a well-known hardware wallet, may be more expensive, it offers a $50 voucher in USD, EUR, or GBP. This is the safest and most convenient way to store your crypto assets securely. Sign up for Trezor here.
If you prefer a more affordable option, the Ledger Wallet is an excellent alternative at a lower price point. The Ledger Nano X costs just 149 EUR or 149 USD, more than half the price of Trezor, and provides a secure way to store your crypto. With your private key, nobody can access your assets, as long as you keep the key safe. Sign up for a Ledger Nano X now and start safeguarding your cryptocurrencies in a hardware wallet.
