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Could the Nasdaq Become a Cryptocurrency Exchange?

By Matthew Frankel, CFP® – Apr 27, 2018 at 2:32PM

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Comments from Nasdaq's CEO indicate that it's a possibility.

All of the top 10 cryptocurrencies are in positive territory on Friday, and it's been a generally strong week for bitcoin (BTC-USD) and most other cryptocurrencies. Since Amazon launched its blockchain templates last Friday, cryptocurrencies have trended upward, with some altcoins up by more than 50% over the past week.

Adding fuel to the rally this week was a Wednesday CNBC interview with Nasdaq (NDAQ -0.63%) CEO Adena Friedman, in which she indicated that the exchange would be open to supporting cryptocurrency trading in the future. It is also widely reported that several big-time institutional investors are gearing up to get into the cryptocurrency markets, which could drive prices higher.

Stacks of gold coins bearing a bitcoin symbol

Image source: Getty Images.

Today's cryptocurrency prices

Before we get into the Nasdaq CEO's comments and some other interesting cryptocurrency news, here's a look at the 10 largest cryptocurrencies by market capitalization, and how much each has changed over the past 24 hours, as well as over the past week.

Cryptocurrency Name (Code)

Price in U.S. Dollars

Day's Change

1-Week Change

Bitcoin (BTC)

$9,279.70

5%

9.3%

Ethereum (ETH)

$678.07

7.3%

15.2%

Ripple (XRP)

$0.85

5.1%

(3.1%)

Bitcoin Cash (BCH)

$1,410.99

5.8%

29.3%

EOS (EOS)

$17.16

16%

60.1%

Litecoin (LTC)

$151.71

4%

0.9%

Cardano (ADA)

$0.30

8.3%

4.7%

Stellar (XLM)

$0.41

9.2%

9.6%

IOTA (MIOTA)

$2.01

6.9%

4.4%

TRON (TRX)

$0.08

12.3%

53.4%

Data source: Investing.com. Prices and daily changes as of April 27, 2018 at 12:45 p.m. EDT; prices are rounded to the nearest cent where appropriate.

Could the Nasdaq become a cryptocurrency exchange?

In a Wednesday CNBC interview, Nasdaq CEO Adena Friedman indicated that the exchange is open to becoming a cryptocurrency-trading platform -- eventually. "Certainly Nasdaq would consider becoming a crypto exchange over time," she said.

However, Friedman cautioned that this is likely some time away, as cryptocurrency regulation still has a long way to go before the Nasdaq Cryptocurrency Exchange (or whatever it ends up being called) could be created. Even so, she said: "I believe that digital currencies will continue to persist, and it's just a matter of how long it will take for that space to mature."

Institutional investors could start putting money into cryptocurrencies

Among other news items helping to drive investor enthusiasm are reports that indicate institutional investors could be considering cryptocurrencies.

For example, it was reported earlier in April that Soros Fund Management is approved to trade in cryptocurrencies. Also, hedge fund manager John Burbank announced that he plans to raise $150 million for cryptocurrency funds, which his firm Passport Capital started in January.

Earlier this week, it was reported that investment banking giant Goldman Sachs had made a major cryptocurrency hire, and Barclays is also reportedly interested in adding a cryptocurrency trading desk.

On the international front, it was recently reported that cryptocurrency trading is available to institutional investors in Germany for the first time.

Here's the point. Until now, cryptocurrency trading has been largely fueled by smaller players (relative to hedge funds and big banks) putting relatively small amounts of money into the market. If large institutional investors start putting serious money into cryptocurrencies, it could certainly create upward pricing pressure throughout the market.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Matthew Frankel has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends AMZN. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.

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