On Tuesday, February 26, the leading benchmark for U.S. liquidity NASDAQ launched the Bitcoin and Ethereum Liquid Indices (BLX & ELX) on its platform. These two crypto liquid indices are launched by Nasdaq in partnership with blockchain data and research company Brave New Coin (BNC). Furthermore, the launch comes just in 15 days from its previous announcement.
The Liquid Index from BNC provides real-time information on the prices of the two crypto tokens. The final data provided consider several factors like stability, book depth, volume, ticket size, and others. The data of these two indices gets refreshed every thirty seconds. This method helps to bring more transparency in the pricing of the crypto assets.
Thus, the entry of qualified players like NASDAQ in this space gives the market better confidence in institutional participation. Speaking on the development of cryptocurrency Liquid Index Fund by Brave New Coin, company CEO Fran Strajnar said:
“The LX program was born out of a need for clear and transparent price discovery of liquid cryptographic assets and is a bigger need today then it was back in 2015 when we started this program”.
Ripple Liquid Index Fund
Just like the BTC and ETH Liquid Index Funds, talks on the ‘Ripple Liquid Index Fund’ (RLX) have gathered steam. BNC notes that it is currently in the final stage of developing the RLX. BNC is also working with several different market participants to create custom basket indices.
Furthermore, Coinbase recently agreed to list the XRP token on its professional trading platform Coinbase Pro. Coinbase Pro exchange services to high-end traders and professional investors. Thus, the listing of the XRP token can serve as an endorsement for the crypto token by institutional players.
Furthermore, it also opens up the possibility of listing the XRP Liquid Index Fund on the NASDAQ platform. As of now, Coinbase Pro is not a contributor to the global price for XRP. However, looking its huge trading volumes it could soon be a part of this.
Auditing Through IOSCO Principles
BNC’s Liquid Index family notes that it follows a methodology of independent auditing done through IOSCO (International Organisation of Securities Commissions) principles. Strajnar also noted:
“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.”
Further, Strajnar stressed on how cryptocurrency financial instruments are slowing come into demand with time. He said:
“The crypto derivative wave is inevitable. Once custody was solved, first with Fidelity’s announcements last November, and now with indices that align with IOSCO principles being available through the Nasdaq, there’s going to be a rush to produce all manner of financial instruments, which the institutional users have been asking for, for almost 3 years now.”