Coinbase Starts To Attract Institutional Investors

Updated on

Even though the cryptocurrency industry has been providing returns to investors for several years now, institutional investors have generally steered away from putting their money in this industry. This is an indication of the need to customize crypto products as well as iron out the regulatory concerns against investing in the industry.

Get The Timeless Reading eBook in PDF

Get the entire 10-part series on Timeless Reading in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.

Q2 hedge fund letters, conference, scoops etc

It is for this reason that Coinbase, America’s largest cryptocurrency exchange and the 12th largest exchange in the world has appointed Jeff Horowitz as its first ever chief compliance officer. Jeff Horowitz previously held a similar position at Pershing LLC, a subsidiary of BNY Mellon.

Provoking Investor Interest

The appointment of Jeff Horowitz follows the launch of four Coinbase products targeted at institutional investors earlier this year. According to research by Willis Towers Watson, global asset owners control $131 trillion of wealth across the world. By appointing Jeff Horowitz as the company’s chief compliance officer, Coinbase is focusing on interesting these regulators and regulators in cryptocurrencies as a viable investment asset.

The cryptocurrency industry has numerous viable blockchain-based projects that investors can support and earn good returns. They include BQT,  a hedge trading and crypto exchange project and IOU, an e-commerce focused platform that makes it possible for businesses to gauge customer satisfaction.

At the same time, by appointing Jeff Horowitz, Coinbase could be addressing investor protection concerns by ensuring that the cryptocurrency space is safe for them. A quick look at Horowitz's background clearly shows why he was an ideal pick for Coinbase. Besides  Pershing LLC, Horowitz had been involved in setting up anti-money laundering and compliance programs at Salomon brothers, Goldman Sachs and Citigroup.

Other interesting ideas to consider are HFC Coin, a peer to peer platform for collateralized financial derivatives and Gath3r, a platform that optimizes how people monetize.

Main Focus

For institutional investors to view digital assets as viable investment options, the Horowitz will have to focus on various things to entice this class of investors. According to Joseph Oreste, founder and CEO at Qupon, clear definitions on compliance can help hedge funds invest in companies. As such, Coinbase will have to support distributed ledgers with faster confirmation times.

He says, “There is a need for regulatory and compliance rules for platforms that want to operate above board. With clear definitions on compliance,  then hedge funds can perform due diligence risk assessments and invest in companies that are clearly in accord  with regulations or rules. Supporting distributed ledgers with the fastest confirmation times can service many hundreds of thousands of transactions per second, and these  can facilitate application migration from centralized to decentralized and distributed services.”

On his part, Reginald Ringgold, founder of BlockVest says that Jeff Horowitz will need to focus on two additional aspects, which are mainly improving the trading options and capabilities, as well as the settlement process.

He notes, “His second area of focus should be improving the trading platform options and capabilities, currently these are very basic and rudimentary. The third area of focus should be improving the settlement process as it is currently way to slow compared to what institutional investors are used too.”

Leave a Comment