Crypto Lists reports that the second largest US stock exchange, Nasdaq Inc., is set to take a significant gamble in the cryptocurrency market by entering crypto custody services.
The well-known exchange plans to launch its own crypto custody services as Wall Street sets itself to capturing institutional investor interest, a group that prefer others to handle their investments and don’t really want to touch or handle token addresses for any crypto assets themselves.
Institutional investor interest has been rising with the crypto winter that has witnessed a slump in several cryptocurrencies. Crypto custody providers want to cash in on the increasing demand. By using Crypto Lists website and free live chat, individuals can manage to hold cryptocurrencies in a safe manner and with way lower costs than by using a custody service, which typically charge between 2 and 5% for simply setting up a wallet and holding your crypto assets in a safe manner. Continue below to learn about what Nasdaq plan to offer and how you can handle crypto assets yourself with a hardware wallet, making it way safer than the traditional way of holding crypto such as Bitcoin (BTC) and Ether (ETH).
Plans in Place for Nasdaq Crypto Custody Services
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Crypto Lists has received credible sources that the Nasdaq intends to initially provide crypto custody services for Bitcoin and Ether to institutional investors, including hedge funds. Many perceive it as a crowded market of institutional bitcoin custody. However, Nasdaq is adamant to dip its toes into cryptocurrency. There is a conviction that Nasdaq is yet to initiate operations as it awaits pending approval to enter into the cryptocurrency custodian market.
Nasdaq is also launching a new subsidiary dedicated to cryptocurrencies that align with its initiative to offer crypto custody services. The subsidiary is known as Nasdaq Digital Assets. Nasdaq Inc’s executive vice president and head of North American markets, Tal Cohen confirmed that the new subsidiary will initially offer custody services to institutional investors for Bitcoin (BTC) and Ethereum (ETH).
The company has onboarded the former lead at prime broker services at crypto exchange Gemini, Ira Auerbach. Auerbach will be the head of the Digital Asset subsidiary at Nasdaq. He believes institutional adoption will drive the next wave of the financial revolution. Ira Auerbach strongly holds that cryptocurrency is the ideal market for Nasdaq to input trust.
The stock exchange initiative on offering crypto custody services lays a new mark for the stock exchange company. It brings it into direct competition with more established firms in the crypto market. These include competition with crypto exchange Coinbase and crypto custodians, Anchorage Digital, and BitGo. It also faces competition from firms such as BNY Mellon and State Street.
Nasdaq Prior Experience in the Crypto Market
Nasdaq has had previous interactions with the crypto market from at least 2018. The firm had offered market surveillance technologies to various crypto exchanges, including some like Coinbase, BitGo, and Gemini which will be direct competitors.
The exchange also unveiled the launch of the Hashdex Nasdaq Crypto Index ETF in February 2022. The Crypto Index ETF is based on its own index, which seems to be created by a Brazilian firm considering the .com.br URL used on the official website.
Earlier in May 2022, Nasdaq partnered with the Brazilian firm, XP. The purpose of the partnership was to build a digital asset exchange named XTAGE. One of the executives at Nasdaq, Roland Chai, stated that the partnership with XP offered new opportunities to investors and other organisations. XP released a statement indicating that the digital asset exchange launch is set for 2022.
In competing with firms such as Coinbase and FTX, the stock exchange company has overall decided to offer technologies to participants in the crypto market. This is in opposition to operating a market itself.
Crypto Adoption on the Rise
BitMEX CEO, Alexander Höptner forecasted that the Ethereum Merge causing a shift to Proof of Stake would attract institutional investors. Institutional firms are highly concerned with the efficiency and environmental impact of crypto. Henrik Andersson, an executive at Apollo Capital shared the same opinion that institutions will cease their hands-off approach toward crypto. He also believes that there will reach a time people will not want to miss out. He termed it as a career risk not to be invested.
Wall Street firms such as BlackRock teamed up with Coinbase this August providing clients with Bitcoin Trading and its own Bitcoin Investment Product. JP Morgan Chase already developed its blockchain-based trading platform with Goldman Sachs expected to follow suit. There is also Charles Schwab and Fidelity, and others that support the new exchange EDX Markets poised to start operations later in the year.
Crypto Lists believes the move by Nasdaq is to tap into the emerging asset class. Banks, including Barclays, are funding custody service providers with the French Financial guru, BNP Paribas, joining in. It signed a crypto custody partnership with Metaco, the Swiss digital asset safekeeping firm.
Crypto Custody Services may seem a congested business but it can be significantly profitable thanks to the high volumes and rather little work involved. Institutional Custody providers often gain multi-billion dollar valuations.
Nasdaq’s initiative aligns with its objective of being a service provider rather than a platform for the cryptocurrency industry. It also indicates the increasing influence of cryptocurrency in the markets. The public demand may have forced a hand in offering crypto-related services. Many more institutions are expected to join in after Nasdaq’s involvement. But after all, this can be done by yourself. Here is how to handle crypto in a safe manner.
What is needed to keep my crypto safe?
First of all, you need a safe crypto exchange to buy the digital assets from. Crypto.com Exchange and FTX are two of our favourites, so start by signing up for FTX if you like trading through your mobile or go with Crypto.com Exchange if you like it as simple as possible.
The next step is to move your assets to a hardware wallet, which means that they are offline and nobody can steal your digital assets. Obviously, you need to store the password to access the devise in a safe manner. While Trezor, a well-known hardware wallet is a bit more expensive, you currently get a 50 USD or EUR or GBP voucher. This is the safest and most convenient way to store your crypto in a safe manner. Sign-up for Trezor here.
Do you rather spend less, and keep the wallets digitally? Then Ledger Wallet is a great alternative, for a lower cost. Ledger Nano X cost only 149 EUR or 149 USD, more than half the price of Trezor, and is a great way to securely store your crypto. With your own private key, nobody can access your crypto assets, as long as you keep the secure key private and in a safe place. Sign-up for a Ledger Nano X now and start storing your valuable cryptocurrencies in a hardware wallet.