Kraken, a prominent crypto exchange, has unveiled a specialized division targeting institutional clients, following the recent approval of spot Bitcoin ETFs in the United States.
The newly launched institutional brand integrates Kraken’s existing offerings of spot and over-the-counter trading, as well as crypto staking services (for non-U.S. clients). This division is primarily tailored for asset managers, hedge funds, and high-net-worth individuals.
Tim Ogilvie, co-founder of Staked and now heading Kraken Institutional after the acquisition of his firm by Kraken in December 2021, highlighted the rapid growth of institutional interest in crypto. He noted that the approval of Bitcoin ETFs has further fueled this demand.
Since their launch in January, the nine newly approved Bitcoin ETFs have collectively attracted $6 billion in inflows, with an average daily inflow of $196 million. These ETFs recently set a new daily volume record of $2.4 billion.
While Grayscale’s ETF experienced significant outflows, others like BlackRock’s and Fidelity’s ETFs have witnessed substantial inflows, indicating strong market interest.
Coinbase serves as the custodian for eight out of the ten newly launched Bitcoin ETFs, leading analysts to anticipate robust earnings for the platform. With its new institutional arm, Kraken appears poised to capitalize on this trend.
Kraken Institutional aims to introduce a “qualified custody” service supported by Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution. This move positions Kraken to directly compete with Coinbase Institutional and Coinbase Prime, which cater to institutional investors, as well as Binance Institutional, launched in 2022, offering tailored solutions for various institutional users.
Kraken’s foray into the institutional market underscores the growing significance of institutional participation in the crypto space and the heightened competition among major players to capture this market segment.
