Fidelity and Nasdaq Ventures are Backing a New Cryptocurrency Exchange

Fidelity Investments and Nasdaq Ventures have poured millions of dollars into an up-and-coming cryptocurrency exchange, a sign that institutional adoption of digital assets isn’t being deterred by the recent bear market. As Hacked reported last month, both companies are planning to make a big splash in the cryptocurrency market next year.

ErisX Attracts the Big Players

ErisX, an up-and-coming cryptocurrency exchange, has raised $27.5 million from investors including Fidelity Investments and Nasdaq Ventures, Reuters reported on Tuesday. The funding round will enable the company to recruit staff and build out our infrastructure and secure the appropriate steps are taken to develop a regulated market for digital assets,” according to ErisX CEO Thomas Chippas.

Fidelity and Nasdaq Ventures aren’t the only players to have poured money into the startup. Back in October, ErisX closed an investment round that included contributions from TD Ameritrade Holding Corp and Cboe Global Markets Inc. This is a clear indication that major institutions are looking to capitalize on the cryptocurrency revolution regardless of current market dynamics.

The new exchange, which is set to launch next year, gives investors the ability to trade some of the world’s biggest cryptocurrencies via spot and futures contracts. Initially, ErisX will support just three cryptocurrencies: bitcoin, Ethereum and Litecoin. The new platform is still awaiting regulatory approval.

ErisX is operating with the stated goal of “improving the digital asset trading experience for institutions and individuals alike,” according to its official website. The Chicago-based company has recruited a team with several years of experience in the regulated Designated Contract Market (DCM).

Institutional Adoption Grows

That a crypto startup has received backing from Fidelity and Nasdaq may have been somewhat surprising just a few months ago before it came to light that both companies were planning a major entry into the market. While Fidelity’s involvement in cryptocurrency mining was known as far back as October 2017, it wasn’t until October of this year that the company announced plans to handle custody for bitcoin and other digital assets.

“Our goal is to make digitally native assets, such as bitcoin, more accessible to investors,” Fidelity CEO Abigail Johnson said in a press release. The company’s new crypto services will come under the purview of a newly created division called Fidelity Digital Assets.

Nasdaq, meanwhile, recently confirmed that it will launch a new bitcoin futures product in the first half of 2019. VanEck, which is partner to the new venture, has described the forthcoming product as “bitcoin futures 2.0” for its transparency and regulation.

The push for institutional-grade crypto is only just getting started, and the recent downturn isn’t affecting Wall Street’s outlook on the industry. This view was shared by a Goldman Sachs executive, who told an audience at the annual Consensus Invest summit in New York that the year-long correction was “healthy” for the crypto ecosystem as a whole.

“In many ways, the rampant speculation that has been quelled over the past several months is really healthy for the ecosystem and I very much look forward to companies that are actually providing institutional-grade products and services,” Justin Schmidt, who heads Goldman’s digital asset unit, said.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Chief Editor to and Contributor to, Sam Bourgi has spent the past nine years focused on economics, markets and cryptocurrencies. His work has been featured in and cited by some of the world's leading newscasts, including Barron's, CBOE and Forbes. Avid crypto watchers and those with a libertarian persuasion can follow him on twitter at @hsbourgi