- Institutional traders cover over half of the investments on the Coinbase platform.
- Big players in the traditional finance market are entering the crypto industry, like Fidelity and JPMorgan Chase.
Brian Armstrong is the co-founder and CEO of Coinbase, and he recently spoke with Fred Wilson about the Coinbase platform. Wilson, the co-founder of Union Square Ventures and a Coinbase investor, aimed to learn about the customers involved with Coinbase, which was detailed in an article by TrustNodes.
Armstrong commented primarily on their customer base and the trading on their platform, saying that most of the traders on their Coinbase Pro platform are institutional investors. To address these customers, Armstrong explained that the world holds 90% of their funds in institutions, which led the company to start going after these customers too.
The customers had certain needs to be able to trust the crypto world, starting with a trusted custodian. When Coinbase originally approached these investors, a custodian that they trusted was not really available in the market. As a result of the needs, Coinbase started offering different services, like over the counter (OTC) trading with Coinbase custody, leading to more large block trades on the platform. Armstrong added, “Institutions have become, I think, 60% of our trading volumes on Coinbase Pro as well.”
The company plans to continue to invest in more “key customer segments,” which will help institutional investors to feel confident in their activities with the platform. While it is unclear if Coinbase caused a little competition in the traditional market, there are more of these players that are getting into the cryptocurrency market, including Fidelity and JPMorgan Chase. While JPMorgan Chase has decided to launch a digital token, Fidelity recently announced that Bitcoin trading will be available soon for institutional customers.
Bakkt is another platform that will be launching this year, and they will help institutional investors with the purchase and sale of Bitcoin, falling in line with the requirements of the CFTC. With their work, it is possible that Bitcoin could soon be accepted by large businesses, like Starbucks.
The ETF is still a product that is working to be approved by the US authorities. It is primarily being held up as a result of regulatory concerns. However, the SEC has added a number of commissioners, so those regulations may soon change. The vote is unpredictable for now, but changes will hopefully come soon.
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