Nasdaq Launches Bitcoin and Ethereum Price Indices by Brave New Coin
Nasdaq has launched real-time bitcoin and ethereum price indexes. The Bitcoin Liquid Index and the Ethereum Liquid Index are the products of Brave New Coin, a blockchain and crypto data company. The stock exchange adds the two new indices to its wide data suite which hosts over 4,000 indices.
Brave New Coin (BNC) initially announced the partnership two weeks ago. In the announcement, BNC had attributed the partnership to the guidance of Adena Friedman, the Nasdaq CEO. Friedman has been consistently bullish on crypto.
The analytics company today further revealed that it was in the final stages in the development of its XRP Liquid Index. Whether Nasdaq will integrate the new indices is yet to be confirmed. If this happens, it will be one of the best months for the crypto after it was listed on Coinbase Pro yesterday. It would also clarify where institutional investors stand with the ambiguous and hotly-debated issue of whether XRP is a security. Coinbase is reportedly ready to back the crypto irrespective of the classification.
The BNC Liquid Indices calculate the fair global values of various cryptos in USD, usually in 30-second spans. They are part qualitative and part quantitative. They take into account factors such as the volume of trade, tick size and book depth from qualified market participants.
This and other such indices in the crypto market are going a long way in introducing transparency to the market. They are also giving regulators and institutional investors a clear insight into the market.
Speaking about the integration of the indices, BNC’s CEO Fran Strajnar stated:
The LX (liquid index) program was born out of a need for clear and transparent price discovery of liquid cryptographic assets and is a bigger need today then it was back in 2015 when we started this program
Lack of institutional investors has been cryptos’ Achilles heel. They have shied away due to market manipulation and lack of clear regulations. However, this is changing and the investors are pouring in.
Strajnar believes that recent developments have made it easier for institutional investors to venture into crypto. He stated:
The crypto derivative wave is inevitable. Once custody was solved, first with Fidelity’s announcements last November, and now with indices that align with IOSCO (International Organisation of Securities Commissions) principles being available through the Nasdaq, there’s going to be a rush to produce all manner of financial instruments, which the institutional users have been asking for, for almost 3 years now.
However, not everyone shares this view. Longtime crypto critic Warren Buffet recently doubled down on his criticism of cryptos. In an interview on CNBC’s Squawk Box, the iconic investor described bitcoin as ‘a delusion.’ This is just the latest in a long line of descriptions he has used about bitcoin. They include “rat poison squared” and “a pump and dump scheme like nothing ever witnessed.”
Buffet, who is the world’s third-richest person stated:
It [bitcoin] attracts charlatans. If you do something phony by going out and selling yo-yos or something, there’s no money in it — but when you get into Wall Street, there’s huge money.