As Wall Street tries to capture institutional investor interest amid the ongoing crypto winter, Nasdaq is reportedly planning to launch its crypto custody service.
According to The Block and Bloomberg, the exchange provider will initially provide custody services for Bitcoin and Ethereum to institutional investors such as hedge funds. Nasdaq has hired former Gemini Prime CEO Ira Auerbach to lead the new Nasdaq Digital Assets division.
The move would pit the stock exchange operator against companies like Coinbase and BitGo, as well as BNY Mellon and State Street.
Nasdaq’s cryptocurrency offering
The offering, subject to regulatory approval, complements Nasdaq’s existing products to establish a foothold in the cryptocurrency industry. According to Nasdaq executive Tal Cohen, the company already provides security and surveillance tools to crypto firms but will not transition into providing crypto exchange services for the time being.
Wall Street firms appeared unfazed by the latest crypto downturn, buoyed by strong institutional investor interest. In August, BlackRock partnered with Coinbase to provide its clients with Bitcoin trading and its Bitcoin investment product. JPMorgan Chase recently launched a blockchain-based trading platform, and Goldman Sachs plans to follow suit.
EDX Markets, a new exchange that will launch later this year, has received backing from Charles Schwab and Fidelity, among others.
Because of multiple well-publicized hacks in crypto’s short history, institutional investors have been understandably hesitant to enter the space. Cryptocurrency custody services promise increased security by storing large amounts of digital currency for institutions.
