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Bitcoin Is Rising. Want To Know The Possible Reason?

On February 11, #Nasdaq, the world’s second-largest stock #exchange, launched Bitcoin and Ethereum indices to present accurate #prices of the two leading crypto assets.

NASDAQ’S BITCOIN INDEX A LIKELY #PRECURSOR TO CRYPTO INVESTMENT PRODUCTS

According to cryptocurrency analyst Alex #Ziupsnys, the introduction of the crypto indices of #Nasdaq could lead to the approval of a wide range of# investment vehicles in the long-term.

The analyst said:

“NASDAQ to add a bitcoin #index on its platform. They are reading the #writing on the wall and don’t want to get left #behind. There is no stopping this. Adoption #happens gradually right in front of you, until you finally pause, look around, and #bitcoin is the dominant asset.”

“This is big news. The #launch of Nasdaq crypto indices could lead to #regulatory approval for crypto-based derivatives in the market. And as a direct initial effect could mean more #interest from institutional #traders. The feeds are going live Feb 25th.”

BITCOIN ETF IS A PRIME EXAMPLE

In July 2018, the Bitcoin exchange-traded fund (#ETF) proposal of Tyler and Cameron #Winklevoss was officially rejected by the U.S. Securities and #Exchange Commission (SEC).

At the time, among other issues, the #SEC named the pricing of Bitcoin as its main #concern. The commission claimed that the risk of price #manipulation exists on #cryptocurrency exchanges and as such, an ETF cannot be operated based on the price of digital assets on #exchanges.

The official document released by the #SEC explicitly stated that small trades can sway the price of #Bitcoin on #exchanges, and due to the presence of #overseas markets, it is virtually impossible to audit all BTC transactions.

“This commenter #expresses concerns regarding the Gemini #Exchange Spot Price, noting that the nominal price of the Shares under the #proposal is supposed to be tied to the market price of #bitcoins at the Gemini #Exchange, which is closely tied to the ETP proponents,” the #document read.

Speaking to #CNBC in November of last year, SEC Chairman Jay #Clayton further emphasized that cryptocurrencies have to become free from the risk of #manipulation and until the issue is addressed, an ETF will not be approved.

Nasdaq’s Bitcoin Liquid Index (#BLX) and Ethereum Liquid Index (#ELX) provide a real-time spot or reference rate for the price of BTC and ETH in #USD derived from the most liquid parts of the #global market.

The indices of #Nasdaq are not concentrated in a small group of #exchanges or over-the-counter (#OTC) exchanges. Rather, the indices take into #consideration all platforms processing #cryptocurrency trades and find a reliable spot price.

BLX and ELX could serve as the base prices of Bitcoin and #Ethereum for regulated #investment vehicles in the long-term.

With the track record of #Nasdaq in the financial sector and the #emergence of a wide range of cryptocurrency indices, Bitcoin ETF #operators could consider utilizing several indices including #Nasdaq’s BLX and ELX to find an accurate #representation of the value of leading digital #assets.

Currently, firms like #VanEck, #Bitwise, and the Chicago Board Options Exchange (#CBOE) are working with the SEC to release the first Bitcoin# ETF in the U.S. market.

LIQUIDITY IS KEY

As reported earlier this week, #Hwang# Hyeon-Cheol, a former #Citi and #Allianz executive, said that the cryptocurrency market still does not have a stable level of #liquidity and market size for both institutional and retail #investors.

Most investment #vehicles that are pending approval in the U.S. are targeted at retail #investors, and for their success, large liquidity and a reliable #source of price is key.

Analysts expect #Nasdaq’s indices to operate as the main source of crypto prices throughout the years to come, opening the door for various #investment tools.

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