Published: Thu, May 17, 2018
Money | By Armando Alvarado

Coinbase adds products, services to attract institutional investors

Coinbase adds products, services to attract institutional investors

Coinbase has announced the launch of several new products today aimed at on-boarding institutional investors into cryptocurrency markets.

During the last few months, more than 100 hedge funds have announced their intentions of investing in cryptocurrencies, something unseen in the market until recently.

Given the recent interest in blockchain and cryptocurrency from giants like NASDAQ, The New York Stock Exchange, Goldman Sachs, and JP Morgan, it is hardly surprising that Coinbase is seeking to diversify its streams of revenue by catering to Wall Street. Back in November, Brian Armstrong, CEO and Co-Founder at Coinbase unveiled that they were working in this new platform.

He writes, "In partnership with an SEC-regulated broker-dealer, Coinbase Custody is proud to offer a service that couples Coinbase's cryptocurrency security excellence with third-party auditing and financial reporting validation that operates at the high standard of an SEC-regulated, custodial broker-dealer". Coinbase stored more than $20 billion cryptocurrencies for its creation. Lost or stolen crypto funds will likely never be recovered, and this puts institutional investors on edge.

"There is clear demand from institutional clients and financial services professionals for more specific solutions with regard to cryptocurrencies that address their sophisticated needs".

Coinbase's launch partners include 1confirmation, Autonomous Partners, Boost VC, MetaStable, Multicoin Capital, Polychain Capital, Scalar Capital and Walden Bridge Capital. Over the course of the year, Coinbase will be introducing new features such as "low latency performance, on-premise datacenter colocation services, institutional connectivity and access, and settlement and clearing services".

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The Coinbase Custody will be a secure option for crypto storage that will be completely compliant with the United States legislation.

Coinbase Prime is a new set of services which Coinbase says will "fill a missing piece of critical infrastructure needed for institutions" that wish to add cryptocurrencies to the roster.

This may provide institutions with the help necessary to take cryptocurrency investment seriously, and given the potential profit the market offers, it is unsurprising that Coinbase wants a slice of the action. These additions will allow for a more efficient price discovery to occur, creating tighter markets, deeper liquidity, and increased certainty of execution.

While Coinbase has said it doesn't consider tokens on its exchanges to be securities, the regulatory view on that is hazy.

Coinbase, the six-year-old digital currency platform, said it was launching four new initiatives, including a secure way to store crypto assets, something institutional clients had long requested.

The company states that, in the near future, it intends to offer other services like lending and margin financing on the platform and even services like OTC trading and algorithmic orders.

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