Coinbase Custody: $1 Billion in Assets Under Management Just 12 Months After Launch

Brian Armstrong, CEO at Coinbase, one of the largest cryptoasset trading platforms, has revealed that Coinbase Custody now has approximately $1 billion in assets under management (AUM).

All Assets Are Regulated, Insured, Subjected To Internal Evaluations

On May 6th, 2019, Coinbase’s management revealed that Coinbase Custody has added more than 20 different cryptocurrencies to its platform (so far this year). In addition to providing support for a wide range of cryptos, Coinbase’s team aims to “offer a safe, regulated and insured storage platform for all the assets [its] clients request and that pass [its] internal evaluations.”

Launched on May 15th, 2018, Coinbase Custody has been adding an average of around “$150 million AUM a month” and 70 institutional clients have registered (so far) to use the exchange operator’s digital asset custodial solution. This, according to Armstrong, whose comments came during an on-stage discussion at Coindesk’s Consensus 2019 event, held on May 15th, 2019.

Armstrong mentioned that institutional investors are also looking for cryptocurrency services such as “staking and voting, [and] doing governance on-chain.” Expressing views that are similar to many other blockchain industry participants, Armstrong believes proof-of-stake (PoS)-based cryptocurrencies will be widely used as their adoption rate is “growing rapidly.”

While most institutional clients are primarily interested in Bitcoin-related investments, Armstrong said that investors are now also more open to investing in other digital assets.

First Custodian To Provide OTC Trading “Directly From Cold Storage”

During the first of this year, Coinbase Custody has been integrating new features and support and it also became “the first institutional-grade, qualified custodian” to provide staking services for cryptoassets held in cold storage (offline). Coinbase Custody is also one of the first platforms to offer over-the-counter (OTC) trading “directly from cold storage.”

Only Around 200 Institutions Are “All In” On Crypto “So Far”

According to Fred Wilson, a partner at Union Square Ventures: “The token funds and venture funds will make up the first two big institutional funds. For them [traditional institutions] to take their chips and go all in, I don’t see that in the next year or two.”

He also mentioned:

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 US and 100 in Asia are all in so far.

Notably, Armstrong revealed that 60% of Coinbase’s “trading volume” now comes from institutions.

He added:

I would love to be in a world where people could self-custody … and still participate in exchanges, we’re talking to people at StarkWare about that.

Interestingly, Armstrong has also acknowledged that Coinbase is becoming increasingly centralized and that the exchange is “a victim of [its own] success.”

OKEx to Launch Bitcoin Options Trading Before Year's End

Popular cryptocurrency exchange OKEx has announced it’s set to launch bitcoin options trading later this month on December 27, with a simulation set to begin on December 12.

As detailed in a press release shared with CryptoGlobe, the move will see OKEx become the first cryptocurrency exchange to offer crypto-to-crypto trading pairs, spot, futures, perpetual swaps, and options trading in a single platform.

OKEx will offer its traders both buy and write (sell) options which “enhances trade flexibility and market transparency with trade prices that closely reflect market trends.” Other bitcoin options platforms so far only offered buy options. The exchange’s release notes it’ll use a rigorous anti-manipulation system “designed to prevent close price manipulation.”

OKEx’s CEO, Jay Hao, said:

We have been seeing the increasing demand of crypto derivative products across all our client segments, especially from our institutional clients, which have shown the fastest growing demand in derivative trading, especially on futures or perpetual swap. We aim to provide the broadest range of trading and risk management tools to all our clients.

Hao noted options are a unique instrument that lets traders manage, price, and hedge the volatility of cryptoasset with a combination of contracts. Options are a derivative that gives traders an opportunity to buy or sell an underlying asset depending on the contract they hold after paying a premium.

To access OKEx’s options trading users will have to go through a know-your-customer (KYC) verification process, and pass a suitability test to show they understand what they’ll be trading.

As CryptoGlobe recently covered the cryptocurrency exchange is also set to soon launch USDT-margined perpetual swap trading, on December 16. The USDT-margined perpetual swap delivers several underlying cryptocurrencies to speculate on including BTC, EOS, ETC, ETH, LTC, BCH, BSV, TRX, and XRP. Traders will be able to use a massive range of leverage, from 0.01-100x.

Derivatives exchange giant CME Group is also looking to launch an options product that’s tied to its bitcoin futures offering. Bakkt, the Intercontinental Exchange’s crypto venture, is set to soon launch options contracts as well. Deribit and LedgerX already offer options trading.

Featured image via Unsplash.