Coinbase has achieved a significant milestone by becoming the only full-service prime brokerage in the crypto industry. According to John D’Agostino, head of strategy at Coinbase Institutional, a prime broker must offer a comprehensive suite of services, including trading, custody, financing, derivatives, and cross-margining. In the crypto space, this also includes staking. D’Agostino notes that only a handful of firms in traditional markets, such as Goldman Sachs and Morgan Stanley, qualify as full-service prime brokers, and that smaller brokers often struggle to provide the full range of services.
In the crypto industry, Coinbase has managed to assemble all of these services into a single platform, known as Coinbase Prime, which holds over $350 billion in assets under custody and serves as custodian for more than 80% of U.S. bitcoin and ether ETF assets. The company's institutional platform processes roughly $236 billion in quarterly trading volume and supports over 470 assets across 20-plus blockchains.
With the recent introduction of cross-margining between spot and derivatives positions, Coinbase has solidified its position as a prime broker. D’Agostino believes that the company's comprehensive suite of services will make it an attractive partner for banks and other financial institutions, which may choose to 'rent' rather than 'build' their own crypto capabilities. While the threat from traditional financial institutions is currently limited, D’Agostino is more concerned about the potential disruption from startups.