Forget the fact that Bitcoin and other major cryptocurrencies all fell on Wednesday. This is a legit market. And Adena Friedman, CEO of Nasdaq, reminded everyone of that again today during an interview on CNBC.
Bitcoin and other coins are more than a new reality, a new market trend. They are new currencies and methods of payment. As a result, many traditional investors have concluded they need to be in crypto. Nasdaq lends more credence to that notion.
“I believe that digital currencies will continue to persist…it’s just a matter of how long it will take for that space to mature,” Friedman said on CBNC today. “Once you look at it and say, ‘do we want to provide a regulated market for this?’ Certainly, Nasdaq would consider it.”
Nasdaq is already supporting existing crypto exchanges. On Wednesday, the company announced a collaboration with cryptocurrency exchange Gemini, founded by early bitcoin investors Tyler and Cameron Winklevoss. Over the few months, they partnered with San Diego based ETF firm, Reality Shares, to launch two blockchain-related funds. The latest is scheduled to come to market in June.
“If you were to rank interest in cryptocurrency on a scale of zero to 10, Friedman would be a six,” says Eric Ervin, CEO of Reality Shares. “She would help get the SEC comfortable with cryptocurrency trading. She would not passively wait for them to get on board,” he says. “If the SEC wanted her opinion, she would give it a thumbs up.”
Freidman’s comments are not to be taken to mean that Nasdaq has a cryptocurrency exchange mechanism in the works. It does not. It does, however, have a Bitcoin futures contract in the works. Foreign securities exchanges are also looking into making cryptocurrency tradable. The Moscow Stock Exchange said last year that it was building a platform to allow for trading once the regulations are in place.
That’s what the big money investors were waiting for here as well: sharper rules by the SEC. But fewer are waiting for the rules to be written out.
George Soros’ $26 billion wealth management firm is planning to trade digital assets. Adam Fisher, who oversees macro investing at New York-based Soros Fund Management, told Bloomberg this month the fund is approved to trade in crypto.
Venrock, a venture capital firm associated with the Rockefeller family’s personal wealth fund, partnered with CoinFund, a crypto assets hedge fund run by Alex Felix in New York. Together, they are looking for startups that also issue their own coins, CoinFund said on April 6.
This is maybe the second inning of the long cryptocurrency game.
“If you think it’s too late to participate in what could be the most profitable market of all time, you are dead wrong,” says Ziad Abdelnour, President and CEO of Blackhawk Partners, a New York investment firm. “The industry is still in its infancy despite the explosive growth over the last year. There are hundreds of cryptocurrencies available — the trick is finding those that have the best odds of becoming viable long term,” he says.
Abdelnour thinks Nasdaq is moving with the times.
“The technological innovation at the heart of these currencies, the blockchain, is revolutionizing how business is conducted,” he says. “Dozens of major banks and money management firms have pending projects in this space, including Citi, Credit Suisse, UBS, and MetLife.”
Goldman Sachs reportedly hired crypto trader Justin Schmidt.
Barclays is considering a crypto trading desk.
Some 56 finance firms are said to be standing by ready to enter the crypto markets by the end of the third quarter.
“I think that this is going to happen sooner rather than later,” says the Reality Shares CEO. “Investors are going to invest in cryptocurrency and just follow the standard rules. The current security laws are not hard to follow: don’t commit fraud and treat investing in them like you would a muni-bond or any other security for that matter, because that is what these cryptocurrencies are becoming.”