Today crypto exchange Coinbase announced it acquired fund manager One River Digital Asset Management (ORDAM), which will be rebranded as Coinbase Asset Management (CBAM) and operated as an independent subsidiary to target institutional interest in cryptocurrencies.
The two companies had an existing close relationship. Coinbase Prime is used for execution and Coinbase Custody provides custody for ORDAM, an SEC-registered investment advisor. Additionally, Coinbase invested in ORDAM’s $43 million Series A alongside Goldman Sachs and Liberty Mutual. Alan Howard is also a backer.
Coinbase said its platform already supports $130 billion of quarterly institutional trading volume and has $50 billion in institutional assets. It claims that at the end of 2022, around a quarter of the 100 largest hedge funds globally used Coinbase. In August last year, BlackRock enabled crypto access through a Coinbase integration. And it has a relationship with TradFi technology firm Broadridge.
Earlier this year, ORDAM unveiled the ONE Digital Separately Managed Account (SMA), which uses Coinbase Prime for trading and Coinbase Custody, with ORDAM providing investment strategies and indexes. This is targeted at wealth managers and financial advisors. At the time, ORDAM mentioned the capability of using this for asset tokenization.
ORDAM’s CEO Eric Peters will lead Coinbase Asset Management and the remainder of One River Asset Management – the non-digital side which Coinbase does not own.
Recent surveys of institutional interest in digital assets show interest varies depending on the type of investor. A Fidelity survey late last year showed massive interest and engagement from crypto hedge funds, high net worth individuals and financial advisers. However, traditional hedge funds, endowments and pension funds are far less keen. Its survey found that only 7% of traditional hedge funds have crypto investments.
JP Morgan’s e-trading survey published last month said that 72% of traders had no plans to trade crypto and 14% were either already trading or planned to within a year.