Feb 14, 2019 11:00 UTC
Feb 14, 2019 at 11:00 UTC
Nasdaq Integrates BNC’s LX Indices
American stock exchange Nasdaq will be adding Brave New Coin’s Ethereum and Bitcoin Liquidity Indexes to its suite of over 4000 indices called the Nasdaq Global Index Data Service.
Nasdaq is the leading benchmark for American technology shares trading as well as indexing.
Nasdaq’s CEO Adena Friedmann is known for her bullish sentiments on Blockchain Technology. Under her leadership, the stock exchange is aiming to foster mass adoption of cryptocurrency and bring in more transparency in the trading of digital assets.
Market regulators find the opacity persistent in the crypto markets as a major hurdle in analysing the proposed Ethereum and Bitcoin ETFs.
Another reason that could hamper the adoption of the existing Bitcoin Future Contracts is the inherent volatility in the spot markets.
To protect investors who trade in digital currency on various exchanges Nasdaq is bringing the technologies and surveillance processes used in the capital markets to the crypto markets.
According to the CEO of Brave New Coin, Fran Stranjar, the new asset class of digital currencies has a mixed liquidity profile. Starnjar is of the view that it is essential to be cognizant of the technological and geographical diversity of digital assets to bring in transparency and ensure relevancy.
The Brave New Coin’s Liquid Index (LX) factors in both qualitative elements such as the stability as well as the quantitative factors such as the book depth, volume, and tick size to estimate a fair value for Bitcoin and Ethereum’s price every 30 seconds. The price is represented in USD.
The Liquid Index’s methodology has been audited independently against the key principles laid out by the International Organisation of Securities Commissions. Stranjar explained,
“BNC endorses the IOSCO principles and fully embraces the IOSCO’s goals of addressing the obvious conflicts of interest in the benchmark-setting process, which the nascent crypto industry is vulnerable to.”
Even though Bitcoin is a digital asset, however, there exists a huge disparity in its price among the various crypto exchanges. According to Stranjar, the implementation of audited BLX and ELX indices will provide benchmark pricing information to the industry participants.