Coinbase says more institutional investors are now using its platform to build direct positions in the cryptocurrency market.
Crypto fund managers are now getting more backing from institutional investors that see the crypto market as an alternative investment strategy.
In a report, the exchange says it observed a “noticeable uptick in institutional business’s growth” in the first half of the year.
According to Coinbase, the “greater visibility of reputable investors warming up to digital assets” is also helping to fuel growing “confidence among this community.”
In May, a hedge fund, Tudor Investment Corporation, disclosed it had taken positions in bitcoin. At the time of this announcement, there were reports quoting the hedge fund’s CEO, Paul Tudor Jones, arguing that bitcoin is a better hedge against inflation.
Jones predicted that the record central banks’ monetary expansion of 2020 will be a “potential catalyst for an increased interest in bitcoin.”
On Monday, July 27, the price of bitcoin passed $10,000 for the first time in several weeks before breaching the $11,000 mark. At the time of writing, the price of bitcoin is oscillating between $10,500 and $11,000.
The recent bitcoin price movement coincided with reports suggesting an imminent release of a second stimulus check for Americans.
In the meantime, Coinbase acknowledges that its “investors are still in the early days of untangling the relationship between macroeconomic policy and crypto.”
Nevertheless, Coinbase says it is seeing a “growing base of our institutional clients organizing around the thesis that BTC provides exposure to an alternative monetary policy system with supply mechanics that are diametrically opposed to those of central banks in 2020.”
Coinbase’s institutional investors demand deeper capabilities to help them allocate and trade. In response to client demand, the exchange says it is building market-leading brokerage services.
The recent acquisition of Tagomi fits the leading exchange’s plan to bolster “our offerings for advanced traders and the most sophisticated crypto investors.”
Coinbase adds it will continue to invest in leading data analytics businesses through Coinbase Ventures.