NYSE and Nasdaq embracing bitcoin

The biggest U.S. stock exchange operators are taking steps to embrace bitcoin, spurring speculation the digital currency is coming up from underground. Nasdaq OMX Group Inc. revealed Tuesday that New York-based Noble Markets, a platform for trading bitcoin, has agreed to license Nasdaq's X-stream technology. Noble is adopting the same software used by securities exchanges around the world, and a related system runs the Nasdaq Stock Market, one of the biggest equity exchanges. The news follows the New York Stock Exchange's January agreement to invest in Coinbase, another platform for trading the digital currency. Markets for buying and selling bitcoin took a reputational hit when one of the biggest, Mt. Gox, failed in 2014. Mt. Gox filed for bankruptcy after discovering it had lost bitcoins belonging to customers and itself. Deploying Nasdaq's software could give Noble greater legitimacy. “It is a vote of confidence in bitcoin the technology,” Nicholas Colas, chief market strategist at Convergex Group, said. “Now that you are seeing big organizations providing technology, there's a feeling that bitcoin is here to stay.” (More: The best and worst investments of 2014) While some bitcoin startups have recently built their own trading technology, Nasdaq's system has been battle-tested for years. Nasdaq provides trading software to companies including Japan Exchange Group Inc. and Singapore Exchange Ltd., which are among the biggest market operators in the world. OTHER EXCHANGES “Nasdaq is open to providing its technology to other bitcoin exchanges,” Ryan Wells, a Nasdaq spokesman, said. Noble was founded by John Betts, whose resume features stints at Goldman Sachs Group Inc., Morgan Stanley and UBS Group AG. Mr. Betts said his finance career included designing trading systems. His time working for the giants of finance may be a sign of maturation for bitcoin, and contrasts with Mt. Gox, which was originally envisioned as a place to buy and sell playing cards for the game Magic: The Gathering. (More: Winklevoss twins seek Nasdaq listing for bitcoin ETF) Nasdaq's involvement is a good sign, according to Adam Draper, a venture capitalist at Boost VC who invests in bitcoin startups. It “obviously shows that they think bitcoin is here to stay,” he wrote in an e-mail, referring to Nasdaq.