Nasdaq to launch cryptocurrency liquid index

Getting your Trinity Audio player ready...

The NASDAQ Stock Exchange appears to be venturing into the cryptocurrency markets as it announced it will launch a Bitcoin Core (BTC) and Ethereum (ETH) Liquid Index effective from February 25.

According to the official announcement by NASDAQ, the Bitcoin Liquid Index (BLX) and the Ethereum Liquid Index (ELX) are designed “to provide a real-time spot or reference rate for the price of 1 Bitcoin and 1 Ethereum respectively quoted in US Dollars and based on the most liquid ends of their markets.”

It remains to be seen whether this move will have a positive or negative effect on the price. One may recall that the introduction of Bitcoin Futures had an extremely negative effect on the price of BTC, which slumped from a high of around $20,000 in December 2017 to less than $6,000 in February 2018 – a slump of almost 70% in a matter of a few weeks.

NASDAQ goes on to state that both indices are calculated using a methodology that has been independently audited against key IOSCO principles. The BLX is one of the most widely-referenced BTC indices among crypto traders and has been calculated back to 2010. Likewise, the ELX has been calculated back to 2014. So the historic trend of the currencies’ prices is well backed up – at least according to the statement.

From Monday, February 25, data recipients will receive real-time index information from the proprietary GIDS data feed with the following attributes:

The Bitcoin Liquid Index will be available every 30 seconds whilst the Ethereum Liquid Index will also be available along the same timeframe. Additionally there will be an Equities Summary (Message Type F) which will be disseminated at the end of the U.S. and European trading session to relay the summary of the current trading day’s activity for an equity index. Nasdaq will also be sending an Index Directory (Message Type R) which will be disseminated at the start of each day to relay basic index information.

In November 2017, Nasdaq had first indicated it would be launching BTC futures by mid-2018, but soon said it would be deferring rollout in order to create a “unique enough” offering which never happened.