WELL, here we go. Go WHERE you ask? Into “Bitcoin Institutional Land” which is the next step as we leave “Bitcoin Fantasy Land”. Yeah, the numbers are getting bigger…..and bigger. Coinbase has introduced “Coinbase Custody”, an institutional platform that will be military grade secure for extra large institutional clients. Like those with a $10M account. So, here come the hedge funds, family offices, etc to begin investment programs/strategies in the cryptocurrency world. Oh, it ain’t cheap but hey, with the volatility and sharp movements those costs are easily(?) recovered. Uh, hello Coinbase, get ready. “Billy Bob’s” discount institutional platform is getting ready to attract $20B at half your costs. The game begins.
“Coinbase CEO Brian Armstrong officially introduced Coinbase Custody, a platform targeted at institutional investors. The new product is intended to be ultra-secure:
We are designing Coinbase Custody to meet the needs of institutional clients. In particular, we feel that institutional clients require:
- Strict financial controls (multiple signers, audit trails, limits, etc)
- Dedicated account representatives and phone support
- SLAs on funds transfers
- A regulated digital currency custodian
- Multi-user accounts with separate permissions
- Support for a wide range of digital assets and currencies
- Insurance (in some cases)
- And high levels of cyber and physical security
According to Armstrong, Coinbase currently holds $9 billion in user funds in various cryptocurrencies including Bitcoin. Coinbase Custody is exclusively for institutional investors with at least $10 mln on deposit. There is a $100,000 initial setup fee and a fee of 10 basis points per month on all deposits stored on the Coinbase Custody platform.
Money waiting to enter market
Armstrong further emphasized that the finance market currently has over $10 billion in institutional money that has been sitting on the sidelines. Coinbase believes these investors want to purchase digital currency, but have been waiting for a safe way to buy and hold it. Armstrong wrote:
“Over 100 hedge funds have been created in the past year exclusively to trade digital currency. An even greater number of traditional institutional investors are starting to look at trading digital assets (including family offices, sovereign wealth funds, traditional hedge funds, and more). By some estimates there is $10B of institutional money waiting on the sidelines to invest in digital currency today.”…
Full Story at Cointelegraph