Coinbase is already the largest US-based cryptocurrency exchange, but the bulk of assets held there and across other digital currency exchanges are attributable to smaller individual investors, not big-time professional players.
“That’s finally about to change. Coinbase, the largest U.S. Bitcoin exchange, launched new professional-grade trading products for institutional investors (last) week, citing rising demand for cryptocurrency from smart money heavyweights,” reports Fortune.
Last week, Coinbase launched a “Prime” service for professional customers.
“The cryptocurrency market is maturing rapidly as more sophisticated institutional participants enter the space. In fact, in the past few months over 100 hedge funds were created that exclusively invest in and trade cryptocurrency,” according to the Coinbase blog.
‘Coinbase Markets’ Service Features
Coinbase also said it will offer the “Coinbase Markets” service, which includes sophisticated tools and data for institutional-level cryptocurrency traders.
“Coinbase Markets provides a centralized pool of liquidity for all Coinbase products,” said the exchange operator. “Over the course of the year Coinbase Markets will introduce new features like low latency performance, on-premise datacenter colocation services, institutional connectivity and access, and settlement and clearing services. These additions will allow for a more efficient price discovery process to occur, creating tighter markets, deeper liquidity, and increased certainty of execution.”
Recent data indicate cryptocurrency ownership among retail and professional investors remains low, indicating significant potential for growth.
“More than 40 percent of Americans who hadn’t purchased cryptocurrencies said their reason was disinterest or believing there is no need to do so. Another 35 percent said the risk is too high, according to the survey,” reports CNBC. “To that point, 27 percent of people said it’s too difficult to understand and another 18 percent said they believe it’s a scam.”
Coinbase Prime offers features that could boost professional ownership and trading in digital currencies.
“Over the course of the year we intend to offer lending and margin financing products to qualified clients, high touch and low touch execution services like over-the-counter (OTC) trading and algorithmic orders, and new market data and research products,” said Coinbase.
For more information on the cryptocurrency market, visit our Bitcoin category.