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The debut of Nasdaq crypto custody is near. This is a sign of ongoing institutional demand

The debut of Nasdaq crypto custody is near. This is a sign of ongoing institutional demand

created Simon peters27 March 2023

Cryptocurrency markets have largely held their recent gains, although there is still talk of a potential short-term decline.

Bitcoin, for most of last week, traded in the upper part of the $27-28 range, except for some volatility on Wednesday, when it peaked above $000 and then dropped below $28. However, he quickly recovered, and at the moment, he is still trading around $ 400.

Ethereum had a slightly more tumultuous week, starting on a general downward trajectory towards the $1 mark but eventually recovering from a weekly high above $700 to hover around $1 this morning.

Bitcoin is struggling to re-assert its safe-haven status

Last week, we talked about changing the narrative around bitcoin and its status in the financial ecosystem, following concerns about the US banking crisis and wider financial services turmoil.

These fears, of course, linger, but, like uncertainty over bitcoin's near-term price trajectory, it does not silence the voices of a "revival." At the same time, they remind us of the tension in the structure and general perception of bitcoin as an asset.

Bitcoin has always been interesting because it is seen as both a "risk asset" and a safe haven. The risk status is due to the fact that its price against fiat currencies can be very volatile and driven by factors in the macroeconomic environment. However, it is also seen as a potential safe haven as a decentralized network, existing outside the traditional financial system, which, as we have seen, can be unstable and prone to crises.

In most cases, it is easy to confuse the two, and price activity affects the balance of investor sentiment. However, recent weeks have highlighted the distinction between market volatility and structural stability – a distinction that may yet prove crucial to bitcoin's future potential.

Nasdaq Crypto Custody IPO is imminent

According to Friday's report Bloomberg, operator of Nasdaq Inc. is on track to debut digital asset custody services by the end of QXNUMX.

After the plans for the service came to light last September, Ira Auerbach, senior vice president and head of Nasdaq Digital Assets, confirmed that the company is preparing the necessary technical infrastructure and is seeking appropriate regulatory approvals to launch the service in the coming months.

After a difficult few months in the DeFi arena, the involvement of such a major mainstream player in the sector is a welcome reminder of the enduring demand among institutional investors that has long been rumored to be a major driver for wider adoption of cryptocurrencies.

BlackRock continues to explore the digital asset ecosystem

News of Nasdaq custody services comes with a bang following recent DeFi discourses from another traditional finance giant.

In his annual letter, Larry Fink, CEO of the world's largest asset management firm, BlackRock, told investors that the company "continues to explore the digital asset ecosystem," including opportunities such as the tokenization of stocks and bonds.

Fink noted that the industry is "maturing" and that despite heightened risk and the need for further regulation, his team is keeping a close eye on developments - especially advances in digital payments in emerging markets such as India and Brazil.

Once again, such outstanding attention will be welcome news for a sector whose resilience has been thoroughly tested in recent months.

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About the Author
Simon peters
eToro analyst. A graduate of the Faculty of Mechanical Engineering at Brunel University in London. He is CFA UK Level 4 certified in Investment Management.