Coinbase is launching a new suite of tools tailored for high-end investment opportunities in cryptocurrency.
On Tuesday, the San Francisco, Calif.,-based company announced Coinbase Prime, a set of tools and services for institutions, rather than individual traders and the general public.
Citing the plans of over 100 hedge funds that have revealed plans to trade in cryptocurrencies in the past few months alone, Coinbase says that a shift in the market has prompted a growing need to cater for high-end clients and institutions interested in the emerging investment opportunities cryptocurrency offers.
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.
The platform, which will be developed over the next 12 months, will include lending and margin financing products, as well as market data, research offerings, and both high and low-touch execution services like over-the-counter (OTC) trading and algorithmic orders to qualified clients.
“Coinbase Prime will accelerate adoption of cryptocurrency worldwide by helping institutions everywhere participate in this emerging asset class,” the company says.
Another new offering is Coinbase Custody, a custodian in partnership with a broker-dealer that is regulated by the US Securities and Exchange Commission (SEC).
The crypto storage solution will support third-party auditing and financial reporting validation and has already secured partnerships with cryptocurrency institutions including Autonomous Partners, Boost VC, MetaStable, and Walden Bridge Capital.
“There is clear demand from institutional clients and financial services professionals for more specific solutions with regard to cryptocurrencies that address their sophisticated needs,” said Adam White, Vice President and General Manager of Coinbase Institutional. “Through new products like Coinbase Prime and Coinbase Custody, we’re building the necessary capability for institutions that allows cryptocurrencies to be traded and stored in a compliant, trusted, and efficient manner.”
In addition, Coinbase intends to open a new engineering office in Chicago to expand Coinbase Markets, the firm’s cryptocurrency market platform. The company hopes to introduce new features including low latency performance, on-premise data center colocation services, institutional connectivity and access, and settlement and clearing services.
The final piece of the puzzle for Coinbase is the establishment of the Coinbase Institutional Coverage group, which will be established in New York City as a hub for sales, sales trading, research, market operations, and client services.
“By guiding clients through the onboarding process and advising on execution strategies, the Coinbase Institutional Coverage Group will offer personalized white-glove service and help institutional investors navigate the increasingly complex world of crypto asset investing,” the company says.
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.
However, the new products and services are also signaling a shift in cryptocurrency as an industry. Once, the emergence of the blockchain and cryptocurrency such as Bitcoin was viewed purely as a disruptive technology and an alternative to traditional financial institutions and systems.
This may no longer be the case, with regulators worldwide clamping down on anonymized cryptocurrency transactions and interest emerging from established investors.
In April, Coinbase acquired Earn.com, a company which pays users in cryptocurrency to respond to emails and surveys. Earn.com co-founder Balaji Srinivasan has joined Coinbase as chief technology officer.