Coinbase, the traditional retail exchange, bought the prime brokerage platform for digital assets Tagomi targeting the institutional market, said the exchange’s Corporate Development director, Shan Aggarwal, to Coindesk. The operation was announced in late May and is expected to be completed by the end of the year.
Prime brokerage activity for cryptocurrencies is on the rise. This type of business offers institutional clients better access to liquidity, custody, loans and other products related to cryptocurrencies.
Genesis Trading (owned by CoinDesk, DCG), recently bought cryptocurrency custodian Vo1t. London-based Bequant launched a brokerage service in early May and BitGo is also starting operations in this area.
Coinbase said the acquisition comes at a turning point in the industry, with Paul Tudor Jones’ recent statements serving as an indicator for bitcoin acceptance by hedge funds and macro investors. Coinbase has also identified a 100% increase in the volume of professional and institutional traders in the past three months.
Coinbase is the largest bitcoin holder on the market, with around 984,300 BTC in its wallets. The exchange is followed by China’s Huobi (413 thousand BTC), Binance (318 thousand BTC), OKEx (268 thousand BTC) and BitMEX (217 thousand BTC).
What is prime brokerage?
In traditional capital markets, the term “prime brokerage” refers to a set of three or four resources that are provided by investment banks to their hedge fund customers. They are financing for position leverage, operational efficiency and better execution, obtained from a variety of service providers and exchanges.