Coinbase Targets the Big Dogs With a Suite of Institutional Products
Over the past year, more than 100 crypto-centric hedge funds were created while some of the world’s largest financial institutions made moves towards offering digital currency products. Most recently, both Goldman Sachs and Morgan Stanley indicated intentions to launch dedicated cryptocurrency trading desks.
Digital currency exchange startup Coinbase, which recently valued itself at $8 billion, is capitalizing on these developments to help accelerate the world’s adoption of cryptocurrency by bringing new capital, greater awareness, and additional infrastructure to the crypto-space. Now, Coinbase has launched a range of products and services designed for institutional clients.
Today we're announcing the Coinbase suite of institutional products. As institutions continue to enter the cryptocurrency market, we are committed to building the products and services that uniquely meet their needs.https://t.co/o2EppgMpiI
— Coinbase (@coinbase) May 15, 2018
Coinbase is going to leverage its experience from safely storing more than $20 billion worth of cryptocurrencies to create Coinbase Custody. In collaboration with an SEC-regulated broker-dealer, Coinbase custody will offer a service that couples Coinbase’s cryptocurrency security systems with third-party auditing and financial reporting validation that operates at the high standard of an SEC-regulated, custodial broker-dealer.
Despite having the deepest pool of liquidity to the largest number of participants in the crypto-space, Coinbase intends to develop Coinbase Markets, which will be its electronic marketplace.
Coinbase Markets provides a centralized pool of liquidity for all Coinbase products. Over the course of the year, Coinbase Markets will introduce new features like low latency performance, on-premise data center colocation services, institutional connectivity and access, and settlement and clearing services.
Coinbase Prime is going to be their new platform designed specifically to provide a suite of tools and services that institutional investors rely on when trading cryptocurrency. This is meant to accelerate adoption of cryptocurrency worldwide and help institutions to participate in this emerging asset class.
Coinbase Institutional Coverage Group
This group, which is headquartered in New York is aimed at providing great service to institutions. They bring years of diverse and relevant institutional experience from firms such as the New York Stock Exchange, Morgan Stanley, and the SEC and CFTC. By guiding clients through the onboarding process and advising on execution strategies, this team will aims to deliver a best-in-class client experience.
This announcement provides yet another step towards mass adoption of crypto, as Coinbase’s new products help to lower the barrier of entry for institutional clients that otherwise were deterred by dealing with exchanges or insurances that funds were secured.
The last few months have been big for Coinbase, which recently launched its own early-stage venture fund, and completed a $100 million acquisition of bitcoin startup Earn.com. Additionally, the company is now offering block trades for institutional clients via GDAX.
Given that more and more competitors are beginning to move into the retail investor market, including UK-based Revolut, Coinbase is clearly focused on securing market share through institutional clients.