Kraken Unveils New Institutional Division to Compete in Bitcoin ETF Market
Summary:
Cryptocurrency exchange Kraken has launched a dedicated institutional brand to cater to asset managers, hedge funds, and high net-worth individuals. This new branch consolidates existing institutional services such as spot and over-the-counter trading, and crypto staking. It aims to compete with similar offerings from Coinbase and Binance. The launch comes amidst increased institutional interest in cryptocurrency following recent Exchange-Traded Fund (ETF) approvals. Tim Ogilvie, formerly of Staked, will lead the division.
Kraken, a renowned cryptocurrency exchange, has unveiled a specialized unit aimed at providing dedicated services to institutions, stepping into the competitive Bitcoin (BTC) exchange-traded fund (ETF) segment. The new institutional brand, introduced by Kraken on February 27, consolidates its existing institutional services including spot trading, over-the-counter trading and cryptocurrency staking, specifically for clientele outside of the United States. The service targets asset managers, hedge funds, and wealthy individuals. Tim Ogilvie, co-founder of Staked, now spearheads Kraken Institutional following the acquisition of his company by Kraken in December 2021. He pointed out the accelerated institutional inclusion of cryptocurrencies and how the recent approval of ETF has amplified institutional demand. The newly inaugurated nine Bitcoin ETFs have seen a combined inflow of $6 billion since January, averaging a daily inflow of $196 million, hitting a record daily volume of $2.4 billion. Despite the massive outflows from Grayscale’s ETF, other funds like BlackRock and Fidelity’s ETFs have counterbalanced these outflows with their inflows. With Coinbase being the custodian for eight out of ten newly introduced Bitcoin ETFs, analysts anticipate a profitable year ahead for the company. Kraken is expected to stake its claim in the same domain, with a "qualified custody" service under the backing of Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution, set to be launched by Kraken Institutional. Kraken Institutional is seen as a direct competitor to Coinbase Institutional and Coinbase Prime, services initiated in 2021 to cater to institutional investors. Moreover, it challenges Binance Institutional, launched in mid-2022 offering tailored solutions for institutional users like asset managers, brokers, hedge funds, family offices, liquidity providers, and proprietary trading firms.
Published At
2/28/2024 6:37:30 AM
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