Will Coinbase’s Latest Acquisition Usher In A Tsunami Of Institutional Crypto Investment?

Coinbase News: The largest crypto exchange in the United States, Coinbase Global Inc., recently announced that it has acquired One River Digital Asset Management, an industry-leading institutional digital asset manager & investment adviser registered with the SEC. With this acquisition, One River will become the cornerstone of Coinbase Asset Management and provide investment advisory services to a variety of new and existing institutional clients.

Coinbase Acquires One River

According to Coinbase’s official announcement, the takeover assists them in moving closer to their goal of closing the gap that exists between traditional economies and the crypto market. Coinbase is at the center of the institutional digital asset industry, with more than $130 billion in quarterly institutional trading volume and more than $50 billion in institutional assets held on the platform. Over 25% of the top 100 hedge funds in the world by reported assets under management have chosen to join Coinbase as of Q4 2022.

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One River Digital is founded by macro trader Eric Peters as a unit of his larger hedge fund. Unlike the majority of the prominent names in the cryptocurrency industry, One River Digital has built a business to represent only the needs of institutional clients such as pension funds, completely avoiding the needs of retail customers.

In an interview, Greg Tusar, Coinbase’s head of institutional product was quoted as saying:

This is about wanting to bring more institutional capital into the world of crypto. We expect to build on the other side of this crypto winter, an awesome asset-management business.

Coinbase To Drive Institutional Demand

Following the acquisition, the company will be rechristened as Coinbase Asset Management, and Peters will continue to serve as both the chief executive officer and the chief investment officer of the new organization. Marcel Kasumovich, a seasoned investment professional who has worked previously for Goldman, Merrill Lynch, and Soros Fund Management, will continue in his current position as the company’s deputy chief investment officer.

Coinbase already operates a number of subsidiary companies that cater specifically to institutional clients. These include crypto custody, trading, staking, and prime services, in addition to a spot market for tokens and a derivatives exchange. And, as per Tusar, an increased level of regulatory scrutiny is being directed towards some of these companies after the recent crackdown by U.S. SEC. However, to ensure client confidence and regulatory compliance, Coinbase Asset Management will operate as a separate division with the necessary controls and barriers.

In light of the recent Coinbase news, the share price of COIN recovered post-market open and currently trades at $63.09 with a market cap of 14.53 billion.

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