Nasdaq, the world’s second-largest stock exchange, is reportedly planning to add tools to its Analytics Hub that will help users predict the price movements of cryptocurrencies. Introduced last year, Nasdaq’s Analytics Hub uses natural language processing (NLP) and machine learning to analyze information on social media websites.
Data analyzed by the U.S. stock exchange’s proprietary software can then used by investors to assess market conditions, and to gain insight on future price movements. Nasdaq’s Analytics Hub has only been available to traditional asset investors so far, however, cryptocurrency traders might soon be able to use it as well.
During an interview with Coindesk, Nasdaq’s head of alternative data, Bill Dague, said:
given the abundance of interest, we are exploring cryptocurrency related datasets. Whether or not we launch a crypto-related product remains to be seen.
Providing "Sentiment" On 500 Digital Assets
Sources familiar with Nasdaq’s internal operations noted that the exchange’s development of cryptocurrency related tools is currently in its beta, or testing, stage and its first release is scheduled for November.
The new crypto analytics software will reportedly provide “sentiment” on approximately 500 digital tokens. According to inside sources, Nasdaq’s crypto research tools will use a “three-pronged approach” to analyze financial data.
In addition to examining data shared on social media sites and various other data sources, the exchange’s tools will monitor transactions between digital currency trading platforms and wallets. Commenting on how the tools will predict price movements, the source explained:
There's the social media sentiment part, so applying machine learning and NLP, which will start with Twitter and might include StockTwits and then eventually perhaps Reddit.
StockTwits is a social media platform that allows investors and traders to share tips and information related to trading bitcoin (BTC) and traditional assets. Looking at these developments suggests that Wall Street firms are beginning to take more interest in cryptocurrencies.
Crypto Futures, Digital Asset Exchange
In January, Nasdaq CEO Adena Friedman had said that the US-based exchange was “investigating the idea of a cryptocurrency future with a partner.” However, she also noted that Nasdaq would first look into the “risk management issues” related to launching such a product.
Additionally, Friedman said the American stock exchange would only offer crypto futures if there was “proper demand and [its] construct is different from what’s already out there.” In April, the Nasdaq CEO revealed that the giant stock exchange was also looking into launching its own digital currency exchange.
As covered, sources working closely with Nasdaq said that it was looking to act quickly in an effort to begin listing cryptocurrencies by next year.
As CryptoGlobe reported on August 3rd, the Intercontinental Exchange (ICE), the New York Stock Exchange’s (NYSE) parent company, announced its plans to launch Bakkt, a Microsoft-Cloud based platform to “buy, sell, store, and spend” digital assets.