Coinbase has achieved a significant milestone by becoming the only full-service prime broker in the cryptocurrency industry. According to John D'Agostino, head of strategy at Coinbase Institutional, the company has successfully combined trading, custody, financing, derivatives, and cross-margining into a single stack, a feat that its rivals have yet to accomplish. This development is notable, as it mirrors the traditional Wall Street prime brokerage model, with the added layer of staking in the crypto space. D'Agostino emphasized that being able to provide all these services at scale is what defines a prime broker.
In the traditional equities and fixed-income markets, only a handful of firms, such as Goldman Sachs, Morgan Stanley, and Bank of America, qualify as full-service primes. Smaller brokers may support funds but lack the full range of services.
In the crypto industry, until recently, funds had to piece together services from different providers. However, Coinbase is now the only company offering all these services natively. As the largest U.S.-based cryptocurrency exchange and a major provider of infrastructure for institutional investors, Coinbase offers trading, custody, and financing services through its Coinbase Institutional unit.
Its flagship platform, Coinbase Prime, bundles these functions into a single system, allowing hedge funds and asset managers to trade, store, and finance digital assets under one roof. With over $350 billion in assets under custody, representing about 12% of the total crypto market cap, and serving as custodian for more than 80% of U.S.
bitcoin and ether ETF assets, Coinbase has become a key bridge between traditional finance and crypto markets. The company's institutional platform processes roughly $236 billion in quarterly trading volume and supports more than 470 assets across 20-plus blockchains.
Beyond trading and custody, Coinbase has a $1 billion lending book and the industry's largest listed derivatives footprint through its Deribit integration. Its staking business spans 10 to 20 tokens at institutional scale, including dedicated products through Coinbase Asset Management. D'Agostino noted that while other firms may excel in specific areas, such as custody or derivatives, no one else is providing the full range of services in one place. The relative size of the crypto market, currently around 3% to 5% of global equities and fixed-income markets, has limited the involvement of major banks.
However, D'Agostino expects banks and incumbents to partner with companies like Coinbase rather than trying to build their own solutions. In the long term, if crypto grows to 20% or 30% of global markets, D'Agostino anticipates full-scale competition from traditional financial institutions. For now, the main threat to Coinbase comes from startups rather than established players like JPMorgan.