NASDAQ will offer two additional price indices on its platform — Bitcoin (BTC) and Ethereum (ETH).The new indices have been created by Brave New Coin, which is a data and research company in the blockchain and digital asset industry. The Bitcoin Liquid Index (BLX) and the Ethereum Liquid Index (ELX) will provide a real-time spot or reference rate for the price of one bitcoin and one ether respectively — quoted in USD.
Bitcoin and Ethereum Join the Big LeagueThe price index will be available to clients of Nasdaq’s GIDS data feed and joins over 40,000 of other NASDAQ indices — including the likes of the Nasdaq 100 and Nasdaq Composite. The indices provide a single price point for Bitcoin (BTC) and Ethereum (ETH) while sourcing data from the most liquid and trustworthy exchanges. NASDAQ has also confirmed that pricing methodology for the indices meets the IOSCO principles, which ensure that markets used are fair, efficient, and transparent. The BLX and ELX indices will go live on Nasdaq at the end of February. NASDAQ, already a powerhouse in the traditional financial markets, has already dipped its toes in the cryptocurrency industry. The conglomerate previously entered into a collaboration agreement with several cryptocurrency companies and has also made a significant investment in ErisX, an upcoming exchange for institutional investors. Moreover, the company also provides its SMARTS surveillance system to a number of cryptocurrency exchanges.
Demand or Anticipation?As the cryptocurrency industry expands and attracts more investors and traders, NASDAQ is preparing the infrastructure — the “picks and shovels” — for institutional investors. Considering NASDAQ’s stature, the price indices will be used by traders from various types of investment funds for decision making. Reliable price indices for cryptocurrency markets are highly sought after by financial regulators. While 2018 has been filled with Bitcoin ETF applications, all have been rebuffed — partly due to a lack of transparent price sourcing. The digital asset scene has been somewhat muddied by a high number of exchanges engaged in wash trading. Additional reliable pricing and analysis tools for cryptocurrency markets, including NASDAQ’s addition of the two indices, are a step towards better clarity in the markets. What are your thoughts on NASDAQ’s new price indices? What prompted their addition, demand or anticipation? Tell us in the comments!
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