Market participants mostly include asset managers, hedge funds, and ultra-wealthy people.
Kraken, a cryptocurrency exchange, has launched a new division to cater to institutional clients in its pursuit of market share in the spot Bitcoin ETF space.
Announcing the merger on February 27th, Kraken brings together its current institutional offerings, which include crypto staking (for customers outside the US), spot and over-the-counter trading, and more.
After Kraken Institutional acquired his company in December 2021, Tim Ogilvie—co-founder of Staked and current head of the division—said, “Institutional adoption of crypto is expanding quickly,” pinning the increase on the recent ETF approval.
The legalization of ETFs has increased demand from institutions, according to Ogilvie. The nine new Bitcoin exchange-traded funds (ETFs) have set a new daily volume record of $2.4 billion, and since their introduction in January, they have received $6 billion in total inflows, with an average daily inflow of $196 million.
Although other funds have countered Grayscale’s withdrawals with inflows, the ETFs of BlackRock and Fidelity have been the most successful.
Some industry watchers are predicting big profits for Coinbase in the next year since the business is the custodian for eight of the 10 recently established Bitcoin ETFs. Kraken is ready to join the fray in this promising industry.
Ogilvie detailed Kraken Institutional’s plans to provide a “qualified custody” service on February 27th in a blog post. Kraken Financial is a Special Purpose Depository Institution licensed in Wyoming.
When it launches in 2021, Kraken Institutional will compete with Coinbase Prime and Coinbase Institutional, two services that target institutional investors.
Launched in the middle of 2022, Binance Institutional caters to institutional customers such as asset managers, brokers, hedge funds, family offices, liquidity providers, and proprietary trading businesses. It will also be a competitor.
Also Read: Hong Kong’s Crypto License Scheme receives significantly fewer applications than Singapore’s 70
