Nasdaq Developing Tools for Predicting Crypto Markets

Wall Street Nasdaq cryptocurrency markets

U.S. stock exchange Nasdaq is developing a suite of tools for institutional investors that will aim to give them additional insights in predicting how markets for leading cryptocurrencies will move in the future.

According to inside sources, the company is preparing additional tools to include alongside its Analytics Hub, with the aim of helping investors identify trends and other technical factors that could give clues about the future direction of cryptocurrency prices.

The Hub was originally launched in 2017 and provides investors with tools that leverage natural language processing and machine learning to interpret social media and other data sources, as a means of offering insights into markets.

Until now, the Analytics Hub has focused on mainstream securities markets. However, with cryptocurrency now poised to be the next frontier for the application, it’s being seen as the latest indication that Wall Street is warming to the cryptocurrency sector.

Bill Dague, head of alternative data at Nasdaq, said that the move was a natural response to demand, and that “given the abundance of interest, we are exploring cryptocurrency-related data sets.”

However, he was keen to underline that nothing was yet set in stone: “Whether or not we launch a crypto-related product remains to be seen.”

This was contradicted by inside sources, who said the firm is conducting final testing ahead of a launch penciled in for November this year.

According to the sources, the tool will track some 500 cryptocurrency assets, providing insights into fund flows as well as tracking data from social media and crypto exchanges.

“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.”

The developments are the latest positive signal from Nasdaq, coming months after CEO Adena Friedman said it was exploring offering bitcoin futures and was open to the idea of launching a separate cryptocurrency exchange.

Their efforts to develop analysis tools for cryptocurrency traders come alongside similar moves being made by the likes of Bloomberg, Reuters and Dataminr, who have all expressed interest in similar projects in recent months.