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. "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". As a result, the product combines Coinbase's cryptocurrency security experience with third-party auditing and financial reporting validation, thus meeting the requirements of any other SEC-regulated broker dealer. This office will focus on the development of Coinbase Markets, another product which will be a "premier electronic marketplace for cryptocurrencies" according to the company.
If institutional investors take the bait - and judging by announcements from banking giants such as Goldman Sachs, they will - Coinbase's new tools will clear the path for an even larger outpouring of money into cryptocurrencies. 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.
As institutional capital begins to enter the blockchain ecosystem at high speed, Coinbase is positioned to function as a driving force behind adoption and the inevitable maturation of the crypto market. The list of partners so far includes names such as Boost VC and Walden Bridge Capital.
Coinbase Markets is another feature that will create a centralized liquidity pool for all the products on the platform of Coinbase.
Coinbase Rolls Out Crypto Custody Product for Institutions
The Tribune report cites Coinbase's desire to "be close to burgeoning digital currency markets, big investors", and "a vast pool of local talent" for the company's decision to launch an office in Chicago.
These institutions can bring "new capital, greater awareness and additional infrastructure to the space", it said.
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.
The institutional investors along with representatives will get some services for using Coinbase custodial services.
Other offerings include the Coinbase International coverage group, which will be headquartered in NY and is intended focus exclusively on the needs of institutional clients by providing sales, sales trading, research, market operations, and client services support.