One of the missing ingredients for cryptocurrencies to become a mainstream phenomenon is, or was (depending on your stance on whether that has already happened or not) its adoption by institutions. According to the chief executive officer of a prominent crypto exchange, that has already materialized.
In his official Twitter account @brian_armstrong, Brian Armstrong, the CEO of Coinbase, stated that institutional adoption has become a reality, and that 2019 has showed a pretty obvious trend on that end.
“Whether institutions were going to adopt crypto or not was an open question about 12 months ago. I think it’s safe to say we now know the answer. We’re seeing $200-400M a week in new crypto deposits come in from institutional customers,” was the first message he tweeted following the exchange’s latest business venture.
Coinbase Acquirs Xapo’s Institutional Business
Armstrong’s tweets came just after Coinbase Custody announced the acquisition of Xapo’s institutional business in recent hours. “Coinbase Custody is now the #1 crypto custodian for institutions! Excited to carry on the torch with Xapo’s institutional business, one of the great early crypto companies,” he wrote.
Xapo is known around the industry as a pioneer in crypto assets storage, developing security techniques that have kept its clients’ assets safe for five years now.
The move to acquire the global operations of storage firm Xapo provides Coinbase with a crucial boost, as it puts it on the top of the institutional manager list for crypto, with roughly $7 billion of assets under custody.
A “Tremendous Period of Growth and Innovation”
The acquisition, per Coinbase’s blog post, “caps off a tremendous period of growth and innovation for Coinbase Custody. In just over one year since launch, Coinbase Custody has grown to over $7 billion in Assets Under Custody (AUC) stored on behalf of more than 120 clients in 14 different countries.”
According to the published news release, the acquisition of Xapo’s institutional business makes Coinbase the “largest, most globally recognized and most trusted institutional crypto custodian in the world.”
The exchange also wrote that “from the start, our goal has been to build the trusted foundation for institutional investment in Bitcoin (BTC) and crypto assets in general. We’re thrilled to help enable some of the tremendous demand for this emerging asset class.”
The Future is Bright, According to Armstrong
Bitcoin recently experienced a furious bull run that say the price surpass $12,000. That run has somewhat stalled, but despite that fact, Coinbase and Armstrong specifically seems to believe that better days are ahead, in a moment in time in which various new institutional investment products are being greeted to the market.
Among the mentioned investment products are Bitcoin futures offerings, coming from Bakkt and Binance. “In addition to custody, we’re excited to explore new ways to monetize and leverage crypto assets such as staking, borrowing against crypto portfolios and lending crypto to trusted counterparties,” Coinbase wrote about its future plans.
By Andres Chavez