The New Era of the Stock Market with Nasdaq CEO Adena Friedman | All-In Summit 2025

Hey Jason, how are you?

Hi. It's great to see you. Hey.

Yeah. So, you caught some of the action earlier today, right?

Oh, I never like to pick favorites at NASDAQ. We don't pick favorites. We have great companies, but obviously Rene is a wonderful NASDAQ listed company that I've gotten to know him very well with ARM. So, I would say always have great conversations.

Sure, thank you. Well, first of all, we are really proud of our foundation as a market. But as we started to grow and expand the business, when I became CEO, we had about two and a half billion dollars in revenue. Today, or as of the end of last year, we had a little over two and a half billion dollars of EBITDA. So, we've grown and expanded the business quite dramatically. And how we've done that is taking our core as a market and saying, what more can we do for our clients? So we are an architect of modern markets. We provide our technology to our 17 markets and we sell it to 135 other markets around the world. So market infrastructure is our business and we do that globally. Then the second is really powering that innovation economy like companies like Rene, you know, ARM and other great companies. So we've expanded that. So our index business now has about $700 billion of assets under management that are tied to those great innovators in addition to creating better abilities for companies to navigate the public markets and investors to find investments.

And then the third is also building trust across the financial system. And that is anti-financial crime technology, market surveillance technology, other technologies that the banking industry and the broker dealer industry really need to manage their lives in the markets. And you're right, we had a big announcement today.

Yeah. And actually it goes right back to that first pillar being, you know, being the architect of modern market.

So this morning we announced that we're going to be bringing tokenization into our markets. So making sure that equities are tokenized and traded on market in the markets, not in a side sleeve, but actually in the core markets.

I think we are all moving in that direction. We announced several months ago that we're moving to 24/5. So we're moving that way. So Saturday and Sunday not for equities yet. I think that we have to walk before we run, but getting to 24/5 is a major advancement for the US equities markets. And then on top of that, now with tokenization, if we can introduce that also into the markets, it allows us to really think about streamlining the post-trade processing, bringing and modernizing elements of the markets that have a lot of friction. We are hyper resilient and we're hyperscaled. Today we had 95 billion messages come into our systems today and we had a median return time of 20 microseconds from order to trade. We handle like 3 million messages a second. It's hugely scaled. But then at the same time, once that trade occurs, there's a different process. And the post-trade process, as we know, is an area where tokenization really shines and really cutting down the friction, managing capital flows across the global ecosystem and really bringing that capability into the markets is going to be the next.

I actually want to point to that because, honestly, having regulators who want to work on bringing it into the mainstream and want to create the rules of the road is such a refreshing thing because it allows us all to understand how we can operate within a world where there are tenets of investor protection. The technology is going to have things we can and can't do, but also being forward thinking and forward leaning in how the technology is going to be applied is going to be critical. So, we're very excited about the fact that we finally have this convergence of regulation between the traditional markets and the digital markets. How do we bring it all together to frankly advance all markets? And we're very excited about that.

So I think first of all, I started at NASDAQ in 1993, and back in the 90s we had a vision to go to 24/7 markets, and we just couldn't achieve it. Both technologically it wasn't there to do it, but also regulatory, and a big part of that was that resistance from the industry saying I like to be able to finish my day and go home. And actually we need those points in the day. The market open and the market close will continue to exist in a world of 24/5 markets. But you'll have a US trading day and you'll have non-US trading day. Our systems turn on at 4 in the morning and they turn off at 8:00 at night. Trading occurs during that entire period of time, but the official trading days of the United States are 9:30 to 4:00. I don't anticipate that changing because we have to have those moments for the NAVs to be set for mutual funds and things like that. But allowing the entire world to trade these securities, we have the NASDAQ itself. We have the top seven companies in the world listed on NASDAQ. Those companies are global. Investors have global interest. The NASDAQ 100 is one of the most traded products in the world. The futures trade 24/5. So why shouldn't the underlying? So that's how we look at those non-US trading hours and the trading hours, trying to find that confluence.

I think first of all, it's really good to remind all of us why the public markets are so important for the economy. When a company goes public, they get access to billions of investors, and every citizen in this country gets the chance to become an owner in the economy. And when we look at the performance of the NASDAQ 100 over 40 years of its existence, the average return on the NASDAQ 100 over those 40 years is a 14.25% annual return. So that's double the broader market.

If individuals have access to these great companies, as I saw your post a few weeks ago showing the performance of the public markets, it's such an important part of our economy to engage the population in the economy and the growth of the economy and the success of the economy. So I've always believed in the balance between public and private markets. I think there are reasons for them both to thrive and be great for everyone. But the public market experience has become this massive burden, and I think that we call it like you have to cross the Rubicon to become public, and it's become very daunting for CEOs and companies to take that decision. So we have talked very closely with the SEC and others about what can we do to lighten the load, to make it so that it's not such a huge change. We've advocated for changes in disclosure reforms, proxy reform, litigation reform, all of those things. There's such a different existence. It shouldn't be so different.

It's a good question. And I actually do think that you will find that there are really good valid reasons for certain disclosures. I think disclosure is a cleansing event. But they have to disclose so much more than what's actually necessary for an investor to make a smart investment decision. Let's strip that away and get back to the core disclosures. And then offering different ways to actually enter the public markets. We think the direct listing, and we've actually worked closely with Bill and others on a direct listing with the capital raise. Why not have that? We have that ability today. And then SPACs are another avenue to public markets. ICOs over time. We'd like to bring that as a direct listing, a tokenized direct listing. So, how do we bring all those capabilities into the markets and make them available and make these companies feel like it's exciting?

Well, first of all, I would say that Chair Atkins, my first meeting with him was just amazing. He is forward leaning. He wants to create change. He wants to make IPOs great again. He wants to really support the public markets while also frankly looking at elements of the market structure in the established markets and saying, does this all need to exist? Because there's a lot of that too. And then also really embracing the crypto ecosystem to say, what elements of this could be brought in? That regulatory convergence is real. How can we create a regulatory road for crypto markets? How can we actually create a regulatory road for tokenized securities markets? How do those things converge? He's off to a great start.

I think what's held us back is the lack of regulatory clarity. NASDAQ is really good at operating regulated markets. So you ask us to go into a completely unregulated space, that's a pretty different existence. The risk tolerance is much higher. We are always investor protection first. So how do we make sure that we create the right structure with fairness and equality for investors while also being really big innovators? We've moved our markets to cloud, we've brought forth a lot of modern technology into markets, but we also operate best when we have the rules of the road. What's happening now in Washington is the potential for rules of the road, and that gives us an opportunity to participate in a market that has not been available to us.

I would say that what we would want to do is really work with our institutional clients because they also have not been able or willing to play in the markets. Their risk tolerances have a similar profile to ours. So if we can actually bring the institutional ecosystem into crypto assets, we bring tokenization into securities assets, that's a really interesting way for us to play a role in helping evolve these markets and bring them to the mainstream. Many flowers will bloom in that ecosystem.

I have to say the options markets are as much a prediction market as the other prediction markets. So we own and operate the largest options marketplace in the United States. We are very engaged in looking at how you think about making a decision as to the direction of travel in an underlying equity, but you're not actually trading in the underlying equity. So options are a great reflection of a prediction market. The difference though is that in a prediction market it's a binary yes no, versus an option market you're layering in your bets across multiple price points and different durations. There are, by the way, a million and a half strikes in the options markets today. So in some ways the prediction markets make these types of bets more accessible to more people because the options markets are quite complex. Prediction markets are a little bit more simple. So there is an opportunity. And I think it's also good that the SEC and the CFTC are joining forces to think about these markets much more comprehensively. If we can bring that regulatory paradigm across the markets and make more of these types of asset classes more accessible, I think that's good for everyone.

NASDAQ Private Market, which came through the acquisition of Second Market.

That's pretty good. So, how do you think about those opportunities and aggressively going after them? I take it you are invited into those and people hire you to do that. But what about making markets for an OpenAI share or SpaceX shares or Stripe shares?

I think the first thing we focus on in NASDAQ Private Market is being issuer first in how we work with these private companies. They are private companies and they're private for a reason. They want to have control over their shareholder base, and yet they want to create liquidity for their employees, their early investors, etc. And there is a secondary market that is created on the back of these private shares. So how do we work with them to allow that to happen in a fair way to make it so that we can introduce them to other investors that they want to have in their cap table? SPVs are a way to do that. You can roll up a lot of wealth interests in a company and create an SPV through a known institution. The institution becomes the owner. The wealth clients are not actual owners of the shares. They're owners of the SPV that owns the shares. But letting the issuer have the ultimate decision on whether or not they invite those investors in is important in the private context. That's what makes NASDAQ Private Market different than other providers in the private space. We always partner with the issuer.

I think it's important to realize that the issuers, especially private companies, are being very mindful of who they have as owners. Let them continue to do that as private companies. Once you enter the public market, then you've got public investors and that's a different responsibility. And there is different risk involved in opening the aperture to billions of people. There should be disclosures also provided as a result of that. So in the private marketplace, let's make sure that we keep some controls in place around that.

I have. Well, first of all, I think that the rise of index investing is making investing more accessible in general. It's a very inexpensive, very accessible and very liquid way to have a view into a sector or a return profile or a theme and not have to pick stocks. As retail investors, it's hard to sit there and be a stock picker. It takes a lot of time. I tried to work with my son when he was a teenager. He really wanted to do it. So I had to teach him how to read an S1 or a 10K. You spend some time on it. But indexes make investing much more accessible. However, I also agree with you that you have to balance it with active management. You have to have active investors. At the end of the day, I always say that there's a balance between the passive and active world within the markets. Whenever it skews towards the passive, what happens is that creates arbitrage opportunities for the active. If the herd really starts to move the stocks in a certain direction, the active manager should step in and take advantage of that arbitrage. But the real foundation of it though, is that the NASDAQ 100 or these innovative companies are performing the way they're performing for a reason, and it becomes very difficult to beat the index because these companies are very hard. It's hard to find companies that deliver a better return than they do. That's where active management has struggled, because they are trying to beat a benchmark, but that benchmark is such an attractive benchmark.

First of all, I am a huge believer in the dollar as a reserve currency. In fact, we will be persistent as a reserve currency over a long period of time. I think our economy is such a powerhouse. The rule of law and the stability that we have and that we deliver to the world is going to continue to provide that anchor for the dollar to be the reserve currency. But investors will express themselves if they see certain risks start to manifest. I do think, as you guys talk about a lot, the amount of debt that we have in the country is something that we're starting to see manifest itself in the markets, and it will make them look for alternatives if they feel like the return characteristics of a treasury are different than what they could get in another. The risk weight of returns versus other currencies or other treasuries, they will express themselves. I believe in the US. I feel like I believe in the power of the US economy to work its way through this. I believe that you guys talking about it a lot is actually going to help us work our way through it.

The Fed is a staunch believer in the reserve currency. I don't think that they have any significant concerns that have arisen from what you talked about.

I can only speak from my own experience. The Fed is very data driven. They get sources of data, private sources of data, public sources of data. They get private databases of information that they're not going to disclose or share with others as an input. But there are many, many inputs that they take into consideration. And every 10 days we go through and understand a market update and economic update to help us understand and frame what's happening in the economy. They're quite wedded to understanding the data. But they'll take in new sources if new sources become available or they find something that could be useful. They will take that into consideration, but it won't supplant everything else that they're looking at.

I know there's a debate, a healthy debate I would say, on that point. I do have a point of view. I do think that the Fed, we've benefited for almost 250 years on having Fed independence. I think it's important to allow the Fed to think long term, and that's why the term of the Fed chair is six years, to think longer term than through individual political cycles and to be data dependent. I agree that there should be new sources of data that are made available to allow the Fed to continue to make smart decisions. In terms of decision making within the Fed, that independence allows them to look through a lot of different noise in the economy and to think longer term. Are they going to make perfect decisions every time? No. With 2020 hindsight, we could all look back and say, oh, we would have done it differently.

My perspective and my experience is that it is a very data driven, very apolitical organization. The New York Fed has been very focused on just looking at the economy, looking at the market. They take a huge amount of pride in that. They've gone through some very different political cycles. I've been there for almost six years, and yet it's been a very steady process of evaluating monetary policy. Very steady, while they also do a lot to operate the economy. It's pretty cool.

Certainly as the CEO of NASDAQ, we do see it not so much in our specific ecosystem, although there are highly levered ETFs and other things like that. Certainly outside the regulated markets in the crypto space, there's a lot of leverage there too in the derivatives markets. But at the same time, I think there are a lot of checks and balances within the securities ecosystem that forces us to go back towards a mean, and there is oversight that the SEC has on what levered products are at least brought into the public markets. In terms of the Fed and looking at leverage, I think the way that they focus it is what really truly creates systemic risk. The GFC really introduced the fact that there are certain banks that introduce systemic risk by capitalizing the banks the way they have. They feel like they have addressed a lot of that. And yes, some of that activity moves outside the banking system that they don't necessarily have complete control over, but their view is that it's distributed enough that it doesn't necessarily create systemic risk or having a too-big-to-fail hedge fund. Leverage is a part of the system, but I also think there's a responsibility we all have to think about how much.

Private credit I've heard about for several years. I also would say that the banks, to the extent they have a lot of real estate in their portfolio, they've been working through that. I do think that as we start to be in an environment where we can see rates come down, there'll be a lot of pressure eased off of some of those concerns. People are also coming back to work, so commercial real estate is going through a cycle, but it's going to go through a different cycle. I think a lot of banks have been working through those issues and have been managing quite well. We have over 5,000 banks in this country, so it's also again pretty distributive risk.

I think that's a great idea.