Kraken, a leading global cryptocurrency exchange, has unveiled a new platform for institutional clients. This development underscores Kraken’s strategic initiative to streamline its existing offerings into a unified suite for institutional investors, including spot exchange, derivatives trading, qualified custody, and indices. Tim Ogilvie, the global head of Kraken’s institutional business, emphasized that consolidating these services under the new institutional brand aims to facilitate easier access for clients, reflecting the company’s commitment to accommodating the diversified needs of the institutional market.
The announcement is pivotal when the institutional adoption of cryptocurrencies is anticipated to accelerate rapidly. Kraken Institutional intends to roll out its full product suite later this year, featuring “qualified custody” services through Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution. This move aligns with recent regulatory developments, as the US Securities and Exchange Commission proposed guidelines in February 2023 for the safekeeping of client assets by “qualified custodians,” prompting various firms to launch crypto custody services in response.
Institutional crypto market expands with Kraken launch
Kraken’s institutional brand launch is a strategic preparation for welcoming new entrants into the digital asset class. According to Ogilvie, the initiative is focused on cultivating the ground for these new participants rather than merely capturing a share of the existing market. This approach highlights Kraken’s anticipation of a significant influx of institutional investors into the cryptocurrency domain, driven by the evolving landscape of asset management and the growing recognition of digital assets as a legitimate investment class.
The launch marks a noteworthy milestone in the competitive landscape of institutional crypto offerings. It follows three years after the debut of Coinbase Prime, a similar platform by Coinbase, Kraken’s publicly traded rival, which provides custody, trading, and analytics services to institutions. Despite the competitive context, Ogilvie asserts that the market is sufficiently expansive to accommodate multiple institutional crypto offerings. He points to the increasing entry of institutional investors into the crypto space as a factor that will continue to enlarge the total addressable market, suggesting ample opportunity for growth and innovation in this sector.
Setting the stage for future growth
Kraken’s new institutional platform is poised to set a benchmark in providing comprehensive services tailored to institutional investors exploring crypto. The initiative reflects a broader trend of growing institutional interest in cryptocurrencies, a development reshaping the dynamics of the crypto ecosystem. By integrating a range of services under the Kraken Institutional brand, the company aims to offer a seamless experience for institutional clients, ensuring they have access to the tools and resources necessary to navigate the digital asset market effectively.
Moreover, Kraken’s focus on qualified custody services underscores the importance of security and regulatory compliance in attracting institutional participation. With the regulatory landscape for cryptocurrencies becoming increasingly stringent, Kraken’s emphasis on adhering to proposed guidelines for the safekeeping of client assets positions it as a reliable partner for institutional investors.
