Despite the rough 2018 for cryptocurrencies, one of the things that made investors excited is the potential entry of institutional investors into the crypto market. What this can do is bring legitimacy to the somewhat new crypto space. And of course, this could also mean that cryptos could rebound from their months of losses. To give you an idea how much cryptocurrencies lost in 2018, Bitcoin started 2018 at around $14,000 only to trade at around $8,000 today.
A leading US-based cryptocurrency exchange Coinbase is going after institutional investors using four major products that. This will make it easier to trade major cryptos such as Bitcoin, Ethereum, and Ripple.
What Do These Tools Bring to the Table?
The new products offered by Coinbase can address different issues such as problems that hedge funds encounter whenever they try to enter the cryptocurrency market. The products provide safe storage of assets, liquidity, and high-quality support among many others. If institutional investors like it, this could mean big news for Coinbase since they have the potential of getting Goldman Sachs.
Coinbase partnered with an SEC-regulated broker-dealer in order to make these things a reality. It has been paired with third-party auditing. It claims that it is going to store more than $20 billion in cryptocurrency. Coinbase also aims to make it as the “most secure crypto storage solution available”.
This tool is called Coinbase Prime. It is a platform that calls on institutional investors. By the end of the year, this will have advanced tools including margin trading, algorithmic orders, as well as multi-user permissions. However, for the individual traders, they have the GDAX for them.
Coinbase upgrade of their product lineup is by far one of the best things that they’ve come up with now that there are whales in the picture. According to Vice President and General Manager of Coinbase Institutional, Adam White, “There is clear demand from institutional clients and financial services professionals for more specific solutions with regard to cryptocurrencies that address their sophisticated needs”.
Growth of Coinbase
They also announced that there are already more than 100 hedge funds that are looking to work with Coinbase. It is also worth mentioning that Coinbase is adding more than 100,000 users every day during the latter part of 2017. This was during the time when Bitcoin was about to hit its all-time high. The company had more than $1 billion in revenue in 2017. And by April 2018, the company was already valued at around $8 billion. The company was already able to trade $150 billion in assets on its platform and has catered to more than 20 million users.
This project is looking to unlock a large amount of money that is sitting on the sideline. If you will ask Adam White, “we think this can unlock $10 billion of institutional investor money sitting on the sideline”. He also mentioned that “we’re seeing a rapid increase in attention awareness and adoption in the cryptocurrency market”.
And this move does make sense. Wall Street interest on cryptos is definitely on the rise too. You now have 287 crypto hedge funds coming from 175 from the previous year according to Autonomous Next.