San Francisco-based crypto exchange Coinbase has reportedly grown its customer base to over 35 million retail and institutional digital asset investors.
The Coinbase team noted in their Crypto H1 2020 report that the digital asset investor market has been maturing and growing steadily with many large and even more conservative institutional investors now allocating to crypto-assets for the first time.
Institutions are creating accounts on Coinbase in order to “build direct positions and backing crypto fund managers as part of their alternatives strategy,” the report revealed.
It added that the exchange saw a “noticeable” increase in its institutional business’s growth during the first half of 2020. Coinbase confirmed that it added leading university endowments, traditional multi-strategy hedge funds, VCs, and large family offices to its list of clients who are acquiring digital assets directly.
Coinbase noted that it will begin offering customers the option to conduct cryptocurrency trading across several pools of liquidity, which will be supported through its acquisition of digital currency broker, Tagomi.
The exchange noted in its latest report that the crypto-asset market “continued its evolution towards multi-venue best execution,” in which customers are able to route trades via brokerages that aggregate liquidity and provide sophisticated execution algorithms.
The report also mentioned:
“With our recently announced acquisition of Tagomi, we’ve greatly accelerated this transition; Coinbase will integrate multi-venue execution going forward. This will allow for significantly larger orders with minimal price slippage via our brokerage. Clients can also benefit from detailed transaction cost analysis (‘TCA’), enabling them to better understand their cost basis and fees on every trade.”
Coinbase noted in its report that it’s also going to expand its lending business by scaling its credit programs across fiat and crypto-assets, in order to meet client demand.
The report also mentioned that several new Fintech service providers are now operating in the crypto sector. The industry had been anticipating the launch of a cryptocurrency service by Fintech giant PayPal, which might be offered through a partnership or with the help of crypto firm Paxos.
Paxos recently introduced the Paxos Crypto Brokerage, which can assist Fintech firms with launching crypto-related products and services by white-labeling the company’s technology.
Coinbase noted:
“We anticipate that the combination of [our] rapidly advancing crypto-as-a-service capabilities, which make adding crypto easier for fiat-native businesses, as well as visible success stories from public companies that have embraced digital assets, will continue to drive new entrants from the Fintech, brokerage, and banking sectors.
The exchange added:
“We believe that eventually, all modern financial services businesses will want to provide their clients with digital assets as the asset class continues to grow and use cases broaden with advancements in crypto borrowing, lending, payments, staking, governance, remittances, derivatives, insurance, asset management, and more.”
Square’s Cash App, Robinhood, Revolut, SoFi, Tradestation, Swissquote, eToro, Paysafe, and Zeux are just a few of the Fintech firms that now provide some form of crypto brokerage or cryptocurrency payment service to their customers.