NASDAQ On Crypto: Chess, Not Checkers
By TheNews.asia on Altcoin Academy
In light of all the media attention that some traditional stock markets are getting these days for their involvement in crypto (i.e. BAKKT, MERJ, etc.), NASDAQ is way ahead of the curve. They have been under the radar hunting and pecking at the lion’s share of data in the crypto space. They’ve made this abundantly clear in the past few years, if you’ve been paying attention, with the 7+ powerful partnerships they’ve made. That isn’t to say that CryptoCompare and CoinMarketCap, for example, don’t stand to make a mint from their partnership with NASDAQ, but rather that NASDAQ stands to gain the most in the long run. That has been their strategy since entering the crypto market some 6 years ago.
NASDAQ makes approximately 50% of its revenue from data-based services. Data monetization is far more lucrative than any other service that any consumer can be offered. If you need proof of this, just take a look at Facebook and Google (Alphabet), two companies sitting in the lofts with the largest companies in the world. This is why, in my opinion, every crypto company out there should hold onto their data; it’s their gold and their key to the real money. Considering that NASDAQ’s data raid on the crypto space will undoubtedly continue, the urgency for these companies to guard their data with their livelihood becomes even more evident. Think about it: NASDAQ already has the biggest and most visited crypto data aggregator in the space as a partner (CoinMarketCap). Likely if NYSE went to Coinmarketcap right now with an idea to launch a product they wouldn’t be able to do it because of some clause in their partnership with NASDAQ. This is chess, not checkers. Now they just need to start collecting exchanges to gain access to their trade data, which can be woven into all sorts of financial products, like a crypto VIX. A VIX would be extremely popular for institutional investors who don’t believe in the potential of cryptocurrencies.
The BAKKT move reeks of amateurism. NYSE is playing checkers, one move at a time. NASDAQ is playing chess, thinking three moves ahead. Would you rather own the house or own the land that the house is on? NASDAQ will eventually control most of the data in the crypto industry; how will anyone else be able to compete? It’s shaping up to be a monopoly run on the industry as a whole, but these companies don’t realize it because they’re focused on the shiny of a lot of money, institutional money in particular. It’s actually kind of ironic because the crypto space is all about having ownership of your private keys, but the same guys screaming that are giving up their data for cheap. I can’t make a judgment either way on this because it all makes perfect sense when broken down. The stock market is bigger than the crypto market but everyone has to eat. Selling your API services for a couple of hundred bucks a month isn’t going to make you richer than your favorite hedge fund manager, but striking a deal with the 2nd largest stock exchange in the world will.
This piece was written by Marouane Garçon, Managing Director at Amulet. Follow Marouane on Twitter @HopesAPoorHedge
