As interest in cryptocurrencies grows among younger Americans, core financial institutions like NASDAQ and fidelity investments are also trying to respond to the growing diversity of investor demand.
With the US mired in high inflation, the Fed stepped up the pace of interest rate rises, sending cryptocurrencies, previously buoyed by dollar liquidity spills, into a bear market.
Just after last week’s fed rate rise, bitcoin fell below the $20,000 mark again, down an exaggerated 60% for the year, but that hasn’t stopped international financial institutions from moving into cryptocurrencies.
In September, key players including NASDAQ and FUDA launched cryptocurrency-related services. NASDAQ plans to launch a cryptocurrency custodian service, while fidelity will offer bitcoin services to retail investors.
NASDAQ is making its first big foray into cryptocurrencies as America’s second-largest stock exchange prepares to capitalise on growing demand from big investors, foreign media reported. NASDAQ has been planning a move into institutional cryptocurrency hosting services, several people inside the company said.
Nasdaq is no stranger to cryptocurrency markets, having long been involved in US and global stock markets, and has been providing market-monitoring technology for cryptocurrency trading venues since at least 2018. In February, the exchange 2021 the launch of the Hashdex NASDAQ crypto ETF.
Tal Cohen, the company’s executive vice president and head of North n markets, said NASDAQ will initially offer hosting services for bitcoins and ether to institutional investors. Prior to that, NASDAQ hired Ira Auerbach, who is in charge of prime brokerage services at Gemini, the cryptocurrency exchange, to lead the new NASDAQ Digital Assets Division, which is looking to build internally and recruit externally, by the end of the year, it will have 40 people.
“We think hosting is the foundation for any other service we build,” said Ira Auerbach, the newly appointed head of Digital Assets at NASDAQ. Asked why clients would choose a traditional financial firm over an encrypted native to host their digital assets, Auerbach said NASDAQ has a unique niche, because it knows what institutional customers need to use financial products.
NASDAQ said in a public statement that, the launch of the division“Reinforces NASDAQ’s ambition to promote and help promote broader institutional engagement in digital assets by providing trusted institutional-level solutions, with an emphasis on enhanced custody, liquidity and integrity”
It is understood that NASDAQ is seeking the approval of the New York Department of Financial Services to launch the business, the cryptocurrency business, they are more cautious about the external attitude. The move also means that NASDAQ will have to compete not only with cryptographic companies such as Coinbase, Anchorage Digital and BitGo, but also directly with a handful of financial companies, including The Bank of New York Mellon and State Street.
On the other hand, the world’s largest professional fund Fidelity Investments has also taken a big step towards cryptocurrencies.
In mid-september, several foreign media outlets reported that Fidelity Investments was considering allowing retail investors to trade bitcoins on its brokerage platform, according to people familiar with the matter, it marks the financial giant’s launch of cryptocurrency services for a wider audience. People familiar with the matter added that the company had not shared the plans with customers. Fidelity has an app that allows its retail customers to manage their investments from their phones.
Fidelity investment launched a bitcoin trading business for hedge funds and other institutional investors in 2018, and in April Fidelity, the largest provider of 401(K) savings accounts in the US, launched a product, allow employees to deposit 20% of their retirement funds in bitcoin.
It has also launched two new exchange traded funds this year that give clients access to companies in cryptocurrencies and the metasuniverse. It also filed a request with the Securities and Exchange Commission to launch a Bitcoin ETF that, if approved, would give customers direct access to encrypted assets.
When fidelity opened its 401(K) account to bitcoin, industry executives thought it was only a matter of time before the company would allow retail investors to hold cryptocurrencies in their brokerage accounts. In 2014, fidelity started mining bitcoins, according to its official disclosure. By 2018, Fidelity had launched an institutional hosting and trading platform for agency-encrypted assets.
As interest in cryptocurrencies grows among younger Americans, core financial institutions like NASDAQ and fidelity investments are also trying to respond to the growing diversity of investor demand.
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