Shannon Stapleton/Reuters
Coinbase, the world’s largest cryptocurrency exchange, is looking to focus more on institutional clients, CFO Alesia Haas said on Wednesday.
“The way that we look at it is where the money is in the world,” Haas told CNBC. “A lot of that money sits in institutional hands, whether that is in pensions or asset managers. So I think we’ll shift into more institutional money as we go forward.”
Haas also laid out what institutional firms generally look for when seeking their services.
The first step is usually for cryptocurrency custody, a service that Coinbase provides institutional firms so they can have a safe and secure way to store their digital assets, said Haas.
“They really appreciate our history of investing in security that we have not had a loss due to cyberattacks on our platforms since our inception,” she told CNBC.
From there, Haas said it moves into trading, data services, and borrow-lend products, in that order.
“We’re really building deep roots with a lot of our institutional clients across their investing needs in the crypto economy,” she added.
Among its roster of clients are Elon Musk’s SpaceX and Tesla, as well as PNC Bank, Third Point, and WisdomTree, CEO Brian Armstrong revealed on Tuesday during the earnings call. Around 10% of the top 100 largest hedge funds by AUM have also onboarded the company’s institutional product, he added.
The company on Tuesday posted second-quarter earnings that crushed analyst expectations, boosted by a volatility-spurred jump in trading volumes. The chart below shows pronounced quarter-over-quarter growth in both retail and institutional activity.
Retail investors, which pay more fees compared to institutional traders, comprised almost 95% of Coinbase’s transaction revenue in the quarter.
Coinbase’s stock rose to as much as 9% to $294 on Wednesday.