Nasdaq Plus Crypto Equals a New Opportunity

You may have thought from reading the press over the last few months that the ‘crypto-craze’ has ended. Far from crypto-currency being a flash-in-the pan, Nasdaq and fund managers like BlackRock Inc. are starting to take the crypto-plunge. It is true that Bitcoin dropped over 50% in June, whilst other projects such as Terra/Luna and Celsius crashed and highly touted crypto funds such as Three Arrows Capital declared bankruptcy.

However, cryptocurrency may have more life in it yet, especially with Nasdaq and other major players coming on board.

Experienced investors may remember the 1999 ‘Tech Wreck’ where the dot-com bubble supposedly burst, driving many internet companies into the ground. After rocketing up with 400% gains in the early 1990’s, many dot-com companies went spectacularly bankruptand some within a few months of their IPO.

Whilst the majority of 1999 dot-com companies may have been unsustainable, the crash took down some truly great companies as well. The likes of Cisco and Apple dropped 80%, and even Amazon and Microsoft were crushed by up to 60%;  and yet they recovered.

Notwithstanding a loss of 80% of its stock price in 1999, Amazon has since grown over 212,000%, with Microsoft up 242,000%, and Apple up over 196,000%. There is clearly a reward for those who can handle dramatic volatility.

Despite cryptocurrency crashing up to 80% a few times in the short history of this asset class, cryptocurrencies such as Bitcoin and Ethereum have also made stellar gains over time that are in excess of 6,000% and 12,000% respectively.

It seems that some major players are rushing in where others fear to tread. Nasdaq Inc, the second largest stock exchange in the world, has launched the Nasdaq Digital Assets Unit and hired Ira Auerbach, formerly from the Winklevoss twins’ Gemini crypto brokers. Nasdaq Digital’s plan is to increase staff by another 40+ people by the end of the year, coinciding with the timeframe where the US government tentatively plans to introduce crypto legislation.

Trillion-dollar fund management firm BlackRock Inc. has similarly stepped out from its traditional stock and bond funds and partnered with crypto giant Coinbase Global Inc to launch its own digital assets business; joining the likes of JP Morgan, Fidelity, Charles Schwab, Citadel and BNY Mellon who are already in the crypto space. 

“We are very pleased to see some new competitors enter the crypto space,” says Jennifer Robertson, CEO of Boston Trading Co. Ms Robertson co-founded the world’s first diversified crypto mutual fund in 2016, and the Bostoncoin fund has outperformed Bitcoin every year since.

Ms Robertson is no stranger to Nasdaq having already started a collaboration with Nasdaq’s governance division in 2021 in her other business, Board Matters, a well-respected and long-standing corporate governance advisory firm.

Ms Robertson stated she welcomes Nasdaq to the crypto table:

“For several years Bostoncoin was the only crypto mutual fund in existence, and we’ve measured the BOS fund performance against Bitcoin since its inception as there was no peer benchmark. It will be great to see more competition in the crypto mutual fund space as competition is great for innovation and generally better for the investors.”

Traditional investors who may have dismissed crypto as a ‘fad’ or sworn off it entirely after the most recent crash may need to take heed and think twice after seeing these heavy-hitter names enter the crypto game. Where BlackRock, Nasdaq, Fidelity and JP Morgan go, they take billions (if not trillions) of dollars with them. The 1999 ‘Tech Wreck’ may seemingly only be but a cautionary tale. Where many new start-ups may have failed in the past, we also know gains of 100,000% were possible for the dot-com companies; so what will be possible for those sitting at the high-rolling cryptocurrency table?

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