One of the most popular cryptocurrency exchanges – Coinbase is currently on a spree of expansion plans. Having clocked over 14 million registered users and over $1 billion during the crypto craze of 2017, the exchange operator is now setting up its eyes on institutional investors and big players of the crypto trading market.
Coinbase is currently working on plans to set up a new office in Chicago where it will be launching its block trading facility in the near future, reports Business Insider. This new service will launch on the company’s most professional GDAX exchange. GDAX is currently among the top ten crypto exchanges of the globe with daily trading volumes to be over $300 million.
The block trading facility will allow big players to place huge orders outside the normal order books of the exchange. This would be quite an attractive proposition for institutional players who generally find it difficult executing bulk orders on conventional exchanges as they can result in significant price-swings in the market and as a result remain thinly-traded.
In block trading, the orders will be circulated outside the exchange’s constantly updating order books and the transactions will be published on a delay. This will help to mitigate the sudden price swings thereby controlling any extreme volatility or price fluctuations in the crypto market.
Note that Coinbase is not the first to launch the block trading facility in the crypto space. Last month in April, Gemini exchanges headed by the Winklevoss twins announced block trading facility on its platform. Similar, Circle – a digital currency trading desk funded by Goldman Sachs has launched an over-the-counter (OTC) service after a huge demand from institutional players and large-scale traders.
Coinbase is also supposedly launching a special new service for institutional players called Coinbase Custodian for providing the facility for securely storing the crypto holdings. The exchange says that the new service will be as per the standards of the traditional bank’s custody services. This service will however only be available for clients storing $10 million worth of digital currencies.
In addition to the news of launching block trading, Coinbase is currently on a hiring spree while hiring the top talent and professional from the financial industry. Recently, the exchange operator is said to have hired a former trading Director at Barclays, Hunter Merghart. Merghart has a profound experience within the equity trading sector of more than a decade and has previously helped the position of Vice President at RBC Capital Markets.
In the past few months, Coinbase has hired several talented people from the New York Stock Exchange (NYSE). Recently it appointed former Head of Sales for NYSE Euronext – Christine Sandler as the Director of institutional sales for the exchange. Moreover, it also included Eric Scro, ex-Head of finance at NYSE, recently to its team.
It looks like Coinbase wants to put a straightaway competition with the NYSE. However, some experts believe that the exchange operator has still a long way to go. ICE’s Head of data Lynn Martin told Business Standards: “You are talking about a market that really was built 225 years ago and has had multiple evolutions as a result of various crises to a very new market.”
Martin also added that “Crypto markets are very, very new. I like to say the guardrails haven’t been found yet in this market. The regulatory framework hasn’t been found yet in this market. That’s why you don’t find institutional users jumping in with feet first yet.”