Coinbase Takes the Lead in Bitcoin ETF Market
The latest report from Coinbase reveals that the crypto exchange now holds over 90% of all Bitcoin ETFs in the United States. This significant achievement was announced by the CEO, Brian Armstrong, while discussing the company’s performance in the fourth quarter (Q4) of 2023.
In a recent post on February 16, Armstrong highlighted some of Coinbase’s accomplishments in Q4 2023. He specifically mentioned the exchange’s role in facilitating the adoption of cryptocurrencies by traditional financial firms (TradFi).
One of the major areas of adoption is the Bitcoin ETF market, which is currently valued at $37 billion and ranks as the second-largest commodity ETF market after Gold. According to Armstrong, Coinbase has played a crucial role in this development by serving as the custodian for 90% of the investment funds in the Bitcoin ETF market.
A few thoughts on our Q4 Earnings yesterday:
2023 was a great year for Coinbase and we’re in a strong financial position. We cut costs by 45% y/y and shipped products faster with a leaner team driving $95 million of positive net income for 2023, $964 million in positive Adj.… pic.twitter.com/XK8f0EQBdP
— Brian Armstrong ?️ (@brian_armstrong) February 16, 2024
For those unfamiliar, a custodian is a regulated financial institution that holds customers’ securities and assets, providing protection against any form of loss or theft. Notably, Coinbase is listed as the custodian for eight of the 11 recently launched Bitcoin spot ETFs, including BlackRock’s IBIT, Ark Invest’s ARKB, Bitwise’s BITB, and Grayscale’s GBTC, among others.
These statistics indicate that Coinbase is well-positioned to achieve even greater milestones as more traditional financial institutions are expected to invest in Bitcoin ETFs, especially with the proven success and stability of the Bitcoin spot ETFs.
In addition to its success in the Bitcoin ETF market, Coinbase also achieved other notable milestones in Q4 2024, including the launch of its international wing and the layer-2 blockchain solution, Base. The exchange also reported a 45% reduction in annual costs and a total income of $3.1 billion.
Looking Ahead to 2024
Looking ahead to 2024, Armstrong stated that Coinbase will continue to focus on its international expansion and the development of new derivatives products. Additionally, the exchange aims to promote the adoption of crypto payments by transforming the Coinbase wallet into a super app.
Finally, the CEO emphasized Coinbase’s commitment to advocating for a clear regulatory framework for the crypto space. He stated that the exchange is willing to explore all means, including legal processes and engaging with federal legislators, to achieve this goal.
COIN trading at $180.28 on the trading chart | Source: COIN chart on Tradingview.com
COIN trading at $180.28 on the trading chart | Source: COIN chart on Tradingview.com
Featured image from CNBC, chart from TradingView
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Bitcoin has taken the world by storm, becoming one of the most talked-about and sought-after investments in recent years. With its potential for high returns and its decentralized nature, it has attracted a massive following and investment interest from individuals and institutions alike. But despite its popularity, investing in Bitcoin can be a complex and risky process, with concerns regarding security and custody often being a major deterrent for potential investors.
This is where Coinbase Custody comes in – providing a secure and regulated platform for institutional investors to safely enter the world of Bitcoin ETFs. And with coinbase custody managing over 90% of its clients’ accounts, it’s no wonder that it has become the go-to choice for many organizations looking to unlock the power of Bitcoin ETFs.
In this article, we will delve into the world of Bitcoin ETFs, explore the benefits and practical tips of using Coinbase Custody, and share first-hand experiences of institutions who have successfully utilized this platform.
The Rise of Bitcoin ETFs
Exchange Traded Funds (ETFs) have been around for decades, offering investors a convenient and low-cost way to access a variety of assets, including stocks, bonds, and commodities. Bitcoin ETFs, however, are a relatively new development, with the first one being launched in 2015.
Bitcoin ETFs allow investors to gain exposure to the world’s largest cryptocurrency without having to physically hold and store it. This not only eliminates the potential risk of theft or loss but also makes it easier for large institutions to enter the market.
The Power of Coinbase Custody
Introduced in 2018, Coinbase Custody is a digital asset custody service offered by Coinbase, one of the largest and most trusted cryptocurrency platforms. It caters specifically to institutional clients, providing them with a secure and regulated platform to store their digital assets.
With over $7 billion in assets under custody and servicing over 90% of its client’s accounts, Coinbase Custody is the market leader in digital asset custody. Its robust security measures, insurance coverage, and regulatory compliance make it the top choice for institutions looking to invest in Bitcoin ETFs.
Benefits and Practical Tips of using Coinbase Custody
1. Safe and Secure: One of the most significant concerns for institutional investors when it comes to Bitcoin is security. With Coinbase Custody, your digital assets are stored in an offline, geographically distributed vault, protected by biometric access controls, surveillance cameras, and armed guards. This ensures the highest level of security for your investments.
2. Regulated and Compliant: Coinbase Custody is a trust company regulated by the New York State Department of Financial Services. This means it must adhere to strict operational and regulatory requirements, ensuring compliance with industry standards and safeguarding the interests of its clients.
3. Insurance Coverage: Coinbase Custody offers insurance coverage of up to $2 billion for its clients’ digital assets. This provides an additional layer of protection against potential loss or theft.
4. Easy Accessibility: With Coinbase Custody, institutions have easy access to their digital assets, allowing for the quick and efficient execution of trades, withdrawals, and other transactions.
5. Dedicated Support: Coinbase Custody offers 24/7 support to its clients, with a team of experts always available to assist with any queries or concerns.
6. User-Friendly Interface: Coinbase Custody’s platform is user-friendly and intuitive, making it easy for institutions to navigate and manage their digital assets efficiently.
First-Hand Experiences of Institutional Clients
Many institutions have successfully utilized Coinbase Custody to unlock the power of Bitcoin ETFs. Let’s take a look at some of their experiences.
1. ARK Invest: This New York-based investment management firm, with over $42 billion in assets under management, chose Coinbase Custody as its partner in launching the ARK Invest Bitcoin ETF (ARKB). According to ARK Invest, Coinbase Custody’s platform is “designed for institutions, seamless to integrate, and backed by $2 billion in insurance coverage”.
2. SkyBridge Capital: With over $9 billion in assets under management, SkyBridge Capital is a well-known alternative investment firm. Its co-founder, Anthony Scaramucci, has stated that they chose Coinbase Custody due to its strong security measures and insurance coverage. He also praised the platform for its easy accessibility and user-friendly interface.
Conclusion
As Bitcoin continues to gain traction and acceptance as a legitimate investment asset, the demand for safe and secure digital asset custody services will only increase. Coinbase Custody, with its track record and market dominance, is at the forefront of this demand, providing institutions with a reliable and efficient way to unlock the power of Bitcoin ETFs.
With its strong security measures, regulatory compliance, insurance coverage, and dedicated support, Coinbase Custody offers the peace of mind and convenience that institutions need to confidently invest in Bitcoin ETFs.
So if you’re an institutional investor looking to tap into the potential of Bitcoin ETFs, look no further than Coinbase Custody – the trusted and proven choice for digital asset custody.
