Nasdaq Building Tool to Predict Crypto Price Movements

Amid growing interest of the institutional firms in the cryptocurrency market, new services and offerings are being launched by established enterprises. The leading American exchange, Nasdaq, is working on developing analytical tools for predicting the price movements of crypto assets, according to CoinDesk.

Nasdaq Analytics Hub to Host Crypto Prediction Functionality

The new cryptocurrency functionality is currently being beta-tested and is scheduled for launch in November this year, CoinDesk quotes someone familiar with the matter. The necessary crypto-specific analytical tools will be added to the Nasdaq Analytics Hub, a platform that provides access to a fully-vetted unique alternative and financial data used to better inform investment strategies. Launched in 2017, the hub harnesses the processing power and analytical capabilities of advanced technologies like machine learning and natural language processing (NLP) and processes the data gathered from multiple sources to predict future movements of the market with higher precision. While its focus since the launch has been confined to traditional securities like equities, cryptocurrencies may be the next rung for expanding the coverage.

Explaining the top-level approach of the crypto price predictor function, the source told CoinDesk that the system “takes a three-pronged approach to its analysis, looking at fund flows via wallets, data from exchanges and social media.” The social media sources may include Twitter and StockTwits, and may eventually extend to Reddit, a leading social news aggregation, web content rating, and discussion website. The tools are expected to cover around 500 crypto assets and generate necessary predictions and sentiments on their possible price moves.

Such a launch will aim to fill the void that exists for dependable, educational, analytical and secure tools for crypto traders. Once available, Nasdaq’s crypto prediction tools will compete against the likes of other leading data providers like Reuters, Bloomberg, and Dataminr, who have announced plans to offer similar data and content to cryptocurrency market participants. In March, Thomson Reuters expanded its data feed product Eikon to cover data of top cryptocurrencies, while Bloomberg launched the Bloomberg Galaxy Crypto Index (BGCI). (See also, Thomson Reuters Adds Cryptocurrency Data To Desktop Feed.)

Amid rising interest and investor participation in digital currencies market, Nasdaq has been offering hints of active participation in cryptocurrency space. Earlier in April, CEO Adena Friedman said that they "would consider becoming a crypto exchange.” (For more, see Nasdaq CEO Hints at Future Cryptocurrency Exchange.)

It has also been partnering other firms to offer the necessary technology to launch services centered on cryptocurrency. (For more, see DX: The First Crypto Exchange Based on Nasdaq Tech.)

Earlier in November, there were rumors about the exchange possibly launching futures contract for bitcoins. (For more, see Nasdaq May Add Bitcoin Futures in 2018.)

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns no cryptocurrencies.

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