Brian Armstrong, CEO of Coinbase, said that the Coinbase Custody has $1 billion in assets under management (AUM) in just one year after it launched.
During an on-stage discussion at Consensus 2019 event, the panel moderator and Paul Vigna, a reporter from the Wall Street Journal, asked Armstrong about the status of institutional involvement in the cryptocurrency industry.
“We launched our custody 12 months ago, we’ve just crossed $1 billion AUM or institutions, 70 institutions have signed up, adding about $150 million AUM a month, so, to a large degree that has been a success,” Armstrong said.
He added the institutions also don’t want to have their funds sit idle in custody.
“They want to be staking and voting, doing governance on-chain,” Armstrong stated. “I think that will grow rapidly.”
He also underscored that while bitcoin remains the preferred primary asset of institutions, there is also a growing interest for other cryptocurrencies too. At present, Coinbase provides services for 30 assets for institutions, as well as staking-as-a-service for some.
Both panelists Armstrong and Fred Wilson, partner at Union Square Ventures, underscored that the institutions involved are essentially not the large, conventional players most are familiar with, like BlackRock.
“The token funds and venture funds will make up the first two big institutional funds,” Wilson stated. “For them [traditional institutions] to take their chips and go all in, I don’t see that in the next year or two.”
“When people read in the Wall Street Journal that institutions are coming to crypto they think Goldman is coming, but in reality, maybe 100 token funds in the U.S. and 100 in Asia are all in so far.”
Coinbase Pro, the trading platform aimed for more advanced traders, is witnessing significant institutional involvement also, and with over half of its trading volume now coming from said institutions, according to Armstrong.
“Sixty percent of our trading volume is from institutions,” Armstrong stated.
Although being the sole custodian of user funds is so far a success for Coinbase, it is not the exchange’s end goal.
“I would love to be in a world where people could self-custody … and still participate in exchanges, we’re talking to people at StarkWare about that,” Armstrong said.