Coinbase’s CEO Announces $1 Billion In Crypto Being Managed By Custodial Service
- Coinbase Custody has had 70 institutions sign up for their service.
- Coinbase Pro’s trading volume is predominantly generated by institutions.
The Coinbase Custody exchange service only launched about 12 months ago, but it has already had plenty of success. According to CEO Brian Armstrong, the service already has $1 billion in assets under management (AUM).
During the Consensus 2019 event, Armstrong spoke at an on-stage discussion when he was asked by Paul Viga, the moderator of the panel and a reporter for the Wall Street Journal, about institutional involvement in cryptocurrency. Armstrong stated that the custodial platform, was launched a year ago, and they’ve already had 70 institutions sign up with them. There’s $150 million AUM being added each month, which Armstrong considers a success.
However, Armstrong was quick to note that the institutions are not just around to leave their funds sitting idly in custody. He added that these entities are involved to “be staking and voting, doing governance on-chain.” He added that he sees this type of involvement “growing rapidly.”
Considering that Bitcoin is the biggest crypto asset of interest to institutions, Coinbase clearly already offers the coin to their institutions. However, other cryptocurrencies are gaining popularity right now, which is why Coinbase has a total of 30 different crypto assets to choose from, and there are even some coins that have staking-as-a-service.
Armstrong, along with fellow panelist Fred Wilson of Union Square Ventures, said that the institutions that are getting involved are not the big names in traditional finance that everyone knows, like BlackRock. Wilson explained that the first two institutional funds with any kind of significance will be made up of token funds and venture funds. However, he does not believe that traditional institutions will “go all in” within the next two years.
Continuing, Wilson said,
“When people read in the Wall Street Journal that institutions are coming to crypto they think Goldman is coming, but in reality, maybe 100 token funds in the U.S. and 100 in Asia are all in so far.”
Coinbase Pro, the trading platform of Coinbase, has seen considerable movement with institutional investors as well. In fact, over half of the trading volume on the platform is coming from institutions, according to Armstrong. Still, becoming the sole custodian of user funds is not necessarily the end goal of the Coinbase exchange.
Hopefully, users will ultimately be taking a more active and present role in crypto custody, if everything goes according to Armstrong’s plans. He expressed that he “would love to be in a world where people could self-custody.” However, he would want the users to still be able to get involved which exchanges, which is why he and the platform have been in talks with StarkWire.