Earlier this month Nasdaq (world’s second-largest stock exchange) launched two new indices; a Bitcoin index and a Ethereum index. Is this a big deal and a huge step forward to make it easier for institutions (and maybe an ETF) to jump into crypto? Well maybe it’s at least a new step in the right direction. The CME Group, in conjunction with London based Crypto Facilities (just bought by crypto exchange Kraken), launched a Bitcoin Reference Rate (BRR) and Real Time Index (BRTI) back in late 2016. Last year they followed up by launching the same type of indices for Ethereum. So, why would Nasdaq’s be better?
Well first, the Nasdaq indices are more broadly based taking into consideration ALL platforms processing cryptocurrency trades to establish pricing whereas the CME indices are based on just a select group (4-5) exchanges. One of the main reasons the SEC has not passed on several Bitcoin ETF applications is the propensity for possible price manipulation which, of course, can be much easier with a smaller group of pricing sources.
One other big advantage the Nasdaq indices will have over the CME indices? The CME is a futures exchange (CFTC regulated) while the Nasdaq is regulated by the SEC. Big deal? Yes, since any possible ETF will be regulated by the SEC and most institutional ‘players’ are also under SEC oversight.
So, will Nasdaq’s BLX and ELX indices (Bitcoin/Ethereum Liquid Indices) speed up approval for a bitcoin ETF and bring in a new wave of regulated investment vehicles and institutional investors? Well, the live feeds begin on the 25th (like, next week) so it may well be a big turning point for the regulated crypto market. More in depth below.
(Bill Taylor/Fintek Capital)
“On February 11, Nasdaq, the world’s second-largest stock exchange, launched Bitcoin and Ethereum indices to present accurate prices of the two leading crypto assets…
According to cryptocurrency analyst Alex Ziupsnys, the introduction of the crypto indices of Nasdaq could lead to the approval of a wide range of investment vehicles in the long-term.
The analyst said:
‘NASDAQ to add a bitcoin index on its platform. They are reading the writing on the wall and don’t want to get left behind. There is no stopping this. Adoption happens gradually right in front of you, until you finally pause, look around, and bitcoin is the dominant asset.’
‘This is big news. The launch of Nasdaq crypto indices could lead to regulatory approval for crypto-based derivatives in the market. And as a direct initial effect could mean more interest from institutional traders. The feeds are going live Feb 25th.'”…