Nasdaq Inc. is making its first significant push into crypto to capitalize on big-money investors’ appetite for digital currencies. The US exchanges operator launched a digital assets services business on Tuesday, starting with crypto token custody for institutional investors. The New York company, which handles billions of dollars in daily Apple and Tesla share deals, is also considering digital asset trading.
Nasdaq Digital Assets will provide custody services for cryptocurrencies such as bitcoin and ethereum, possibly competing with businesses such as Coinbase (COIN.O), Fidelity Digital Assets, and Winkelvoss twin-owned Gemini.
The stock exchange has extended its anti-financial crime technologies to identify and restrict money laundering, fraud, and market manipulation concerns.
According to Nasdaq, digital asset custody might pave the way for future crypto trading services. But the market for storing crypto assets is getting more and more competitive. Unlike conventional assets such as stocks or futures, asset owners are as liable for maintaining the asset as they are for protecting their cash.
The cryptocurrency industry is recovering after a rough summer, which forced some of its largest businesses to cut off hundreds of people in order to slash expenses. Bitcoin has dropped over 60% in value this year, prompting firms like Celsius Network and Voyager Digital Ltd to declare bankruptcy. The size of the crypto industry has also shrunk from more than $3 trillion to less than $1 trillion, wiping out once-dominant crypto businesses such as Celsius and Three Arrows Capital.