Nasdaq CEO Reveals the Next Era Of The Stock Market - Adena Friedman | All-In Summit
Summary
- Nasdaq’s investment case now extends far beyond its exchange-market foundation. The introduction cited shares up 14% year-to-date, 40% over one year and more than 100% over five years; Friedman added that EBITDA was a little over $2.5 billion as of the end of last year. Nasdaq provides technology to its 17 markets and sells it to 135 others, while its index business has roughly $700 billion in assets under management tied to major innovators—an “architect of modern markets,” not merely a market venue.
- Tokenized equities are coming into Nasdaq’s core market, “not in a sidecar.” Friedman sees the immediate payoff after execution, where tokenization could reduce post-trade friction and improve global capital flows. The existing infrastructure already handled 95 billion messages that day, roughly 3 million per second, with a median order-to-trade response of 20 microseconds.
- The hours expansion is 24/5 first, with 24/7 an eventual direction rather than a commitment. Nasdaq’s systems already turn on at 4 a.m. and off at 8 p.m., while the official U.S. session remains 9:30 a.m. to 4 p.m. because opening and closing moments support mutual-fund NAVs and similar functions. With Nasdaq-100 futures already trading 24/5, the host asked why the underlying securities should not do so.
- Public-market reform could reopen more growth-company upside to ordinary investors. Friedman cited a 14.25% average annual Nasdaq-100 return over 40 years—double the broader market—while conceding that becoming public now means having to “cross the Rubicon.” Her prescription is core disclosure, proxy and litigation reform, plus direct listings with capital raises, SPACs and eventually ICOs conceived as tokenized direct listings.
- Regulatory clarity is the gating factor for Nasdaq’s institutional move into crypto. Nasdaq is comfortable innovating inside regulated markets but has held back from a completely unregulated arena because it puts investor protection first. If Washington establishes “the rules of the road,” Friedman sees an opening to bring institutional clients into crypto assets while tokenizing conventional securities; “many flowers will bloom.”
- Private-share liquidity should remain controlled by the issuer, even when SPVs aggregate wealth interests. Friedman stressed that SPV investors own interests in a vehicle, not the underlying company shares, and defended private companies’ right to decide whether investors enter their cap tables. That directly answered the host’s concern that some secondary platforms go around CFOs and CEOs and anger issuers.
- Friedman remains constructive on indexes and the dollar while flagging debt, leverage, commercial real estate and private credit as risks. Passive investing makes diversified exposure cheap, yet excessive herd behavior creates arbitrage for active managers; meanwhile, strong innovative-company performance makes the Nasdaq-100 unusually difficult to beat. She expects the dollar to remain the reserve currency, described her New York Fed experience as data-driven and apolitical, and reported that the Fed’s view is that off-bank leverage is distributed enough that it does not necessarily create systemic risk or a too-big-to-fail hedge fund.
Deep dive
1. Nasdaq’s equity story now rests on infrastructure, indexes and trust
The episode’s introduction put the stock performance upfront: Nasdaq shares were up 14% year-to-date, 40% over one year and more than 100% over five. Friedman said the company finished the prior year with slightly more than $2.5 billion in EBITDA after expanding well beyond its exchange-market foundation.
Friedman’s operating frame was “architect of modern markets”: Nasdaq provides technology to its 17 markets and sells it to another 135 globally. A second pillar powers the innovation economy, including an index business with about $700 billion in assets under management tied to major innovators.
The third pillar is trust infrastructure—anti-financial-crime systems, market surveillance and technology for banks and broker-dealers. That combination makes Nasdaq both a marketplace and a supplier of the infrastructure through which other markets operate.
2. Tokenization moves on-market as trading stretches toward 24/5
Nasdaq’s announcement was explicitly about tokenizing equities inside the core market, “not in a sidecar.” Friedman argued that the strongest use case begins after the trade, where tokenization could streamline processing, reduce friction and modernize capital flows across the global system.
She described Nasdaq as “hyper-resilient and hyperscale”: 95 billion messages came into its systems that day; it handles about 3 million messages a second and had a median order-to-trade response time of 20 microseconds.
The host’s pushback was that continuous markets could eliminate the end of the trading day and force investors to react at 2 or 3 a.m. Friedman answered that Nasdaq is “walking before we run”: 24/5 comes first, while formal opens and closes remain necessary for mutual-fund NAVs and similar functions. The systems already operate from 4 a.m. to 8 p.m., and the official U.S. session remains 9:30 a.m. to 4 p.m.
Asked whether crypto and blockchain had finally become real, with stablecoins and the GENIUS Act as examples, Friedman welcomed regulators willing to bring the technology into the mainstream with investor protections. Lack of regulatory clarity, and the risk of entering a completely unregulated space, had held Nasdaq back; regulatory convergence now creates the possibility of serving institutions that shared its earlier reluctance.
3. Public markets need a lighter Rubicon without abandoning core disclosure
Against the stay-private-longer trend—the host cited Uber’s 11 years, Stripe’s nearly 15 years and SpaceX—the concern was that much of the upside is captured before ordinary investors can participate. Friedman’s case for public markets began with participation: a public company gets access to billions of investors, and every citizen can become an owner in economic growth. She cited the Nasdaq-100’s 14.25% average annual return across 40 years—double the broader market—as evidence of why that access matters.
The host challenged whether today’s burdens improve company quality or reduce fraud. Friedman conceded that disclosure can be “a cleansing event,” but said companies provide far more than investors need for sound decisions; disclosure, proxy and litigation reform could preserve the core information investors need without making the transition existentially different.
Her preferred capital-formation menu includes direct listings with a capital raise, SPACs and, over time, ICOs understood as “a tokenized direct listing.” She described SEC Chair Atkins as forward-leaning and said he wants to “make IPOs great again.” The host, rather than Friedman, added that the SEC is also examining whether all established market-structure elements need to remain and embracing crypto.
In private markets, Friedman insisted on being “issuer-first.” Asked about making markets for OpenAI, SpaceX or Stripe, she said SPVs can roll up wealth interests, but those investors own the SPV rather than the company shares; the private issuer should control whether they are invited onto the cap table. Once a company enters the public market, public investors and disclosure create a different responsibility.
4. Passive dominance creates its own opening for active capital
The host raised the concentration of the top seven, eight or nine companies and the difficulty of finding alpha. Index investing, in Friedman’s view, makes sector, theme and return-profile exposure inexpensive, liquid and accessible without requiring individuals to master stock analysis. Her counterexample was teaching her teenage son to read an S-1 or 10-K: genuine stock-picking consumes time and expertise.
She nevertheless rejected a purely passive market. When “the herd” moves stocks in a particular direction, prices create arbitrage opportunities that active managers should exploit; passive and active capital therefore operate as a balancing system rather than mutually exclusive models.
Friedman’s harder point was that benchmark strength may explain much of active management’s frustration. Innovative Nasdaq-100 companies are producing attractive underlying results, making it inherently difficult to find enough individual businesses that deliver better returns than the index.
5. Dollar resilience coexists with debt, leverage and Fed-independence risks
Asked about de-dollarization, the host cited a report showing dollar-denominated Treasuries declining from 60% to 40% of central-bank holdings over the last decade, while gold rose from 10% to 20%. Friedman called the U.S. economy a “powerhouse” and pointed to rule of law and stability as durable anchors for reserve-currency status. She still acknowledged that rising federal debt is manifesting in markets and could push investors toward alternatives when Treasuries’ risk-adjusted returns become less attractive.
The host questioned whether the Fed sees enough of the best privately held data to avoid “bad inputs, bad decisions.” Friedman said it combines public data with private databases, considers new sources when useful and, every 10 days, reviews a market update and an economic update—but no single new dataset supplants the broader evidence.
Friedman defended an independent, long-term and data-dependent Fed, noting that the six-year chair term is designed to extend beyond individual political cycles, while conceding, “Are they going to make perfect decisions every time? No.” Her experience with the New York Fed was of a steady, highly apolitical institution that takes enormous pride in evaluating the economy and markets through different political cycles.
On leverage, the host’s example was a fund with $60–70 billion running roughly $1 trillion long. Friedman acknowledged leverage in ETFs, derivatives and especially crypto, but pointed to checks within the securities ecosystem and SEC oversight of leveraged products. Some activity has moved outside banking, where regulators lack complete control, but she reported that the Fed’s view is that exposure is distributed enough that it does not necessarily create systemic risk or a too-big-to-fail hedge fund.
Asked where the biggest risks lie, Friedman cited climbing commercial-real-estate defaults and delinquencies and private credit. She said lower rates could ease some pressure, while banks have been working through real-estate exposures; with more than 5,000 U.S. banks, she also viewed the risk as distributed.