Nasdaq launches its own cryptocurrency custody solution for institutions.

Today Nasdaq Inc. (NASDAQ: NDAQ) in cryptocurrency for the first time and is hiring a new digital asset group, according to a company press release. Bloomberg on September 20, citing Tal Cohen, the company’s head of North American markets. The first step is to offer bitcoin and Ethereum (ETH) custody services to institutional investors.

Over the years, Nasdaq has provided the technology to crypto market participants rather than creating a crypto exchange to compete with Coinbase and other companies.

Asset Custody Solution

The advanced custody solution that Nasdaq Digital Assets will seek to create will integrate liquidity and execution services. The focus will be on connectivity, availability and efficiency in the sector, with an extra layer of protection and security. The offering is subject to regulatory approval.

“Demand from institutional investors to engage in digital assets has increased in recent years, and the Nasdaq is well positioned to accelerate broader adoption and drive sustainable growth,” said Cohen.

He also added:

“With our trusted brand and strong track record as a technology provider to global capital markets, Nasdaq is uniquely positioned to address industry pain points by improving liquidity, scalability and resilience, with the goal of building greater trust in the digital asset ecosystem. to create. »

Market correlation

While stocks and cryptocurrencies are very different types of investments, for most of the major ups and downs that investors experienced in 2022, the stock market and cryptocurrencies went together.

Currently, the correlation between BTC and other traditional assets is at an all-time high, although some time ago the correlation with the S&P 500 also hit an all-time high.

Recent research by kaiko indicates that high and volatile inflation is the main culprit behind the positive correlation between bonds and risk assets over the past month, as inflation tends to push all assets down.

Bitcoin’s correlation with bonds and stocks resumed its rise in September after falling in the summer. Inflation uncertainties, coupled with a Fed tightening, have led to historic declines in risk assets and fixed income assets, challenging traditional approaches to asset allocation. »

Bitcoin’s correlation with traditional assets. Source: Kaiko

The biggest picture investors can get when it comes to the alignment of stocks and cryptocurrencies is that it could be a positive development for the digital asset industry.

Cryptocurrencies are risky assets and they are traded online with other risky assets, and the more embedded they are in traditional portfolios, the higher the correlation with other asset classes should be.

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Disclaimer: The content of this site should not be considered investment advice. Investing is a speculative activity. When you invest, your capital is at risk.

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