The information that was provided to The Block and Bloomberg by their respective sources reveals that the exchange operator Nasdaq is preparing to create its very own cryptocurrency custody service.
Institutional investors such as hedge funds will be the target audience for the debut offering of custody services for cryptocurrencies Bitcoin and Ethereum by the second biggest stock market operator in the United States.
Ira Auerbach, a former CEO of Gemini Prime, has been appointed by Nasdaq to head up the new subsidiary that will be known as Nasdaq Digital Assets.
Auerbach said:
We believe this next wave of the revolution is going to be driven by mass institutional adoption. I can think of no better place to bring that trust and brand to the market than Nasdaq.
In the midst of the prolonged crypto winter, Wall Street is making an effort to pique the curiosity of institutional investors. The companies have given the impression that they are undeterred by the most recent drop in the cryptocurrency market, which is encouraged by the strong demand from institutional investors.
Tal Cohen, an executive at Nasdaq, told Bloomberg that the company would not move into selling cryptocurrency exchange services for the foreseeable future despite the fact that it currently provides crypto companies with security and surveillance capabilities.
In his words:
Demand among institutional investors for engaging in digital assets has increased in recent years, and Nasdaq is well-positioned to accelerate broader adoption and drive sustainable growth.” He added that, “Custody is foundational. Off the back of custody, we can start to develop other solutions, offer execution services, liquidity services, and think about how we support new markets.
