Brian Armstrong, Co-founder and CEO of Coinbase, recently spoke about the need for institutional investors in the cryptoverse and why institutional investors matter a great extent to Coinbase, during Blockchain Week in New York City.
Armstrong revealed that initially, Coinbase was launched as a retail brokerage platform. However, the firm soon realized that for the cryptocurrency industry to mature and grow, institutional investors had to start investing their money in the cryptocurrency market, he added. The CEO further said that around 90 percent of the money around the world was linked to institutions, adding that “it’s not just retail.”
With an intention to start providing services to institutional investors, Coinbase reached out to a few potential customers in order to learn their benchmarks. Through this, the firm collected data of the different requirements, which included being a qualified custodian.
“[…] So for instance, Coinbase Custody is a New York trust Charter; they needed a qualified custodian a place to store these crypto assets before they could keep their money there. That’s the kind of thing that didn’t really exist in crypto at that time and so like many things that […]”
Following this, Coinbase started to build a more trusted infrastructure in order to draw more institutional money, which eventually resulted in these investors becoming an integral part of the firm’s business. He went on to state,
[…] we’ve started to enable features like OTC trading through coinbase custody where these large block trades are starting to happen. And institutions have become, I think, 60% of our trading volume on Coinbase Pro as well. So, these are a really key customer segments for us and I think we’re just gonna keep investing more and more in it […]”
This was followed by Armstrong being asked about the interaction between custody,