Nasdaq Enters Crypto Market as an Institutional Custodian

Nasdaq enters the crypto market as an institutional custodian, starting with Bitcoin (BTC) and Ether (ETH).

Nasdaq Enters the Crypto Market as an Institutional Custodian
Photo by BP Miller / Unsplash

This week Nasdaq, the largest stock exchange in New York, announced its Digital Assets division is launching a custody product aimed at institutional investors.

Why Would Nasdaq Start with Custody?

Custody is an often overlooked sector in crypto, and it clearly needs some adults in the room. Everyone in the space is afraid of doing anything that involves handing over their tokens to an intermediate, “not your keys, not your coins.” This is a massive hurdle for institutional investors, and it will continue to be an issue until firms like Coinbase can either reach the pinnacle of trustworthiness, or firms like Nasdaq enter the space.

Nasdaq also has the advantage of already having developed a suite of custody tools to help large institutional investors solve their standard problems. One has to imagine that the bulk of these tools are a few small tweaks away from being integrated with a crypto custody management system.

Nasdaq is also expanding its anti-financial crime offerings. These are services that the company sells separate of its current custody offerings, but the crypto specific functionality will be offered as a part of the custody services.

Custody for institutional investors is becoming a bit of an arms race recently, with firms like BlackRock partnering with Coinbase and Fidelity working on its own offerings.

To begin with, Nasdaq will be handling custody of Bitcoin (BTC) and Ether (ETH) for customers.