Coinbase Executive Reveals $14 Billion Burst of Institutional Capital Entering Bitcoin and Crypto Markets
The head of institutional coverage at Coinbase, Brett Tejpaul, says institutional interest in crypto assets has grown more than threefold since he joined the crypto exchange in April of 2020.
In an interview with YouTube channel Heidrick & Struggles, Tejpaul details some of the main growth areas at Coinbase under his tenure. The Coinbase executive emphasizes that institutional interest in the space is multiplying week after week.
“We’ve had an explosion of activity… I joined in April of this year. At that time, our institutional assets under custody were $6 billion. Today, we stand at over $20 billion. So more than a three-time increase…
We’re now measuring the fresh capital coming into crypto principally being allocated to Bitcoin in the billions and so week after week after week we’ve had an explosion of incoming capital.”
Tejpaul explains how the exchange has been preparing for the onslaught of institutional money in its partnerships and philosophy on how to deal with governmental regulation of the crypto sector.
“Earlier in the summer we acquired an execution platform called Tagomi and it radically transformed our ability to cater to institutional clients that want to use smart order routing and algorithmic execution. So the stat there is that our trading volumes are 20 times what they were at the beginning of the year…
When I joined in April this year, we upgraded our banking and auditing partners and we’ve got JP Morgan and Deloitte. It’s really important because both of those firms went through a one to two-year period of due diligence to satisfy themselves that we have the right KYC (know your customer) and AML (anti-money laundering) and the fact that we sort of posture ourselves and act like a bank and we’ve opted into being regulated. We’re a safe on-ramp.”
Tejpaul also highlights the importance of visible institutional support for the crypto asset space that came from big players like hedge fund manager Paul Tudor Jones and Michael Saylor’s business analytics firm MicroStrategy.
Tejpaul claims that he has seen direct results from the likes of PayPal jumping into the crypto space, saying that when these highly regarded entities enter the space publicly, it encourages other institutions to follow suit.
“For people sitting on the sideline that are now looking at the major banks, the major accounting firms, major hedge funds, major endowments, and now PayPal is getting into the space. It’s really unleashed a second wave of institutional adoption.”