Kraken, a platform for trading cryptocurrencies, recently unveiled a new department specifically designed for institutional clients, eyeing a share in the growing market of Bitcoin exchange-traded funds (ETFs). On February 27, Kraken introduced this new institutional branch, incorporating its current services for institutions like spot trading, over-the-counter deals, and crypto staking for those outside the U.S. This move targets asset managers, hedge funds, and wealthy individuals.
Tim Ogilvie, the co-founder of Staked, who joined Kraken following its acquisition of his company in December 2021, will lead Kraken Institutional. Ogilvie remarked on the rapid increase in institutions adopting cryptocurrencies, highlighting the push from recent ETF approvals that have escalated broader institutional interest.
Since their introduction in January, the nine Bitcoin ETFs have collectively attracted $6 billion, averaging daily inflows of $196 million. They also set a new record with a daily transaction volume of $2.4 billion. Although Grayscale’s ETF experienced significant withdrawals, the entrance of other funds, particularly those from BlackRock and Fidelity, compensated with substantial inflows.
Coinbase, the custodian for eight of the ten newly launched Bitcoin ETFs, is anticipated to see a strong financial performance in the coming year. Kraken is now positioning itself to capture a portion of this lucrative market.
In a blog post dated February 27, Ogilvie announced that Kraken Institutional aims to introduce a “qualified custody” service supported by Kraken Financial, a Special Purpose Depository Institution chartered in Wyoming. This new service positions Kraken Institutional in direct competition with similar offerings from Coinbase Institutional and Coinbase Prime, which began in 2021 to serve institutional investors. Kraken also faces competition from Binance Institutional, which started in mid-2022 and provides tailored solutions for institutional clients, including asset managers, brokers, hedge funds, family offices, liquidity providers, and proprietary trading firms.
