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A competitor, Kraken, has introduced institutional business solutions in response to the precipitous rise of Coinbase in the spot bitcoin ETF custody market. Considering the increasing preference for spot bitcoin ETFs over traditional financial institutions, this is, therefore, the case. Nearly 90 percent of the total volume of assets under control, or $36 billion, has been captured by Coinbase.
Over the course of two months, nine upcoming spot bitcoin exchange-traded funds amassed more than 300,000 Bitcoin in assets under control. Among these, the United States-based Coinbase has maintained its position as one of the best crypto exchanges.
Now, however, Kraken, a competitor of Coinbase headquartered in California, seems eager to challenge the status quo. Kraken, while introducing a new institutional company, cautioned against the dangers of monopoly associated with custody solutions for spot bitcoin ETF issuers.
Tim Ogilvie, the Head of Institutional at Kraken, asserts that the issuance and implementation of bitcoin ETFs have revealed the need for a more extensive selection of custody services. At this time, it is critical to overcome the concentration risks associated with multi-party custody and avert the sole custodian scenario; thus, the release of Kraken Custody is timely.
Custodians occupy a position of accountability in the burgeoning spot Bitcoin ETF market due to the substantial quantities of Bitcoin that the ETFs themselves hold.
Brian Armstrong, chief executive officer of Coinbase, recently disclosed that the company had obtained custodial mandates from releasers for eight out of eleven Bitcoin transactions.
Ogilvie revealed that Kraken had introduced Kraken Institutional in an effort to drive away Coinbase. Institutions, asset managers, hedge funds, and affluent individuals will be among the prominent financial actors that the organization targets. They are prepared to confront any challenges that Kraken International may present, as he believes that the acceptance of cryptocurrencies is expanding exponentially.
Recently, spot bitcoin exchange-traded funds (ETFs) managed nearly $40 billion in assets. The bar was subsequently raised if the daily figure for the subsequent nine ETFs surpassed the purchasing and selling aspects observed on the first day of trading.
According to Ogilvie, the strategy focuses on institutional players anticipating market entry. Preparing the groundwork for new entrants entering the digital asset market is the objective of his endeavors.