Just last week, sources close to NASDAQ said that soon the US stock exchange will be adding information about cryptocurrencies to the Analytics Hub. The Analytics Hub is a platform that allows institutional investors to gain more information on assets to make better-informed trading decisions. Thus, it allows them to adopt better short-term and long-term strategies. The move to get crypto assets onto the Analytics Hub was a huge step towards the NASDAQ adopting and accepting crypto assets as a whole. NASDAQ has made another step towards that end goal through the acquisition of Cinnober.
Cinnober is a Swedish Fintech which, according to the company, “delivers exchange and real-time clearing technology to market operators, clearinghouses, banks, and brokers.” In addition, to provide trading tools, Cinnober has historically maintained a bullish approach towards digital assets and the notion of making them easier to invest in, which is why many speculate that NASDAQ went after acquiring the company. Furthermore, Cinnober maintains a BitGo platform which offers a multi-signature security and custody solution that is well-suited for large institutional investors. Recently, BitGo received regulatory approval to be a qualified custodian service provide for about 75 cryptocurrencies.
Adena Friedman, President, and CEO of NASDAQ released a statement regarding the acquisition:
“The combined intellectual capital, technical competence, and capabilities of Cinnober and our Market Technology business will expand the breadth and depth of our fastest growing division at NASDAQ. Not only have the global capital markets continued to evolve rapidly, but new marketplaces in various industries are also demanding market technology infrastructure that enables rapid growth and scale as well as access to tools to promote market integrity. This acquisition will enhance our ability to serve market infrastructure operators worldwide, and will accelerate our ability to expand into new growth segments.”
In total, Cinnober was acquired for $190 million in an all-cash deal. In addition to NASDAQ racing to develop a regulated and fully insured cryptocurrency product, a number of large financial institutions in the United States, most notably Citigroup and Bank of America, are looking to bring crypto assets to a wider audience. NASDAQ and these other companies still face a lot of resistance from the SEC, which has rejected many digital assets in the past. In the past view of the SEC, the market is too volatile at this point and they are too vulnerable to “fraudulent and manipulative acts and practices.” They have rejected multiple applications for a Bitcoin ETF, including one from the Winklevoss twins, the notorious founders of Gemini Trust Company LLC. But, new SEC Commissioner, Hester Peirce has taken a different outlook.
“The Commission should not default to a demand that the crypto markets be subject to comprehensive government regulation as a precondition to allowing products linked to those markets to be traded in markets that we regulate.”
With that statement, it seems likely the SEC might hand down a more favorable ETF decision soon.
