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Kraken Unveils New Division Targeting Institutional Clients
Kraken has announced the launch of a new division focused on providing services to institutional clients as part of its strategy to enter the Bitcoin exchange-traded fund (ETF) market. The newly-formed Kraken Institutional brand incorporates existing institutional offerings, including spot and over-the-counter trading, as well as crypto staking services for clients outside the United States.
Kraken Institutional Aims to Attract Asset Managers, Hedge Funds, and High Net-Worth Individuals
The division is specifically targeted at asset managers, hedge funds, and high net-worth individuals looking to engage in crypto trading and investment. Tim Ogilvie, co-founder of Staked, a company acquired by Kraken in December 2021, will lead the Kraken Institutional division. In a statement, Ogilvie highlighted the rapid growth of institutional adoption in the crypto space, attributing it in part to the recent approval of Bitcoin ETFs.
Competition in the Institutional Crypto Market
With the rise of institutional interest in the crypto market, major players like Coinbase and Binance have established their own institutional services divisions. Coinbase, which serves as the custodian for eight of the ten newly launched Bitcoin ETFs, is set to benefit significantly from the growing market. Kraken Institutional aims to compete with Coinbase Institutional and Coinbase Prime, while also facing competition from Binance Institutional, which provides tailored solutions for institutional users.
Plans for Qualified Custody Service and Legal Challenges
Kraken Institutional has outlined plans to introduce a “qualified custody” service, backed by Kraken Financial, a Special Purpose Depository Institution chartered in Wyoming. This move positions Kraken as a secure custodian for institutional clients seeking reliable storage solutions for their digital assets. Meanwhile, the exchange is also addressing legal challenges, having recently filed to dismiss the Securities and Exchange Commission lawsuit against it, arguing that allowing the case to continue would set a dangerous precedent for agency overreach.
Growth of Spot Bitcoin ETFs and Market Trends
Kraken’s new institutional services division comes at a time when spot Bitcoin ETFs have seen significant inflows from institutional investors. Industry giants like BlackRock and Fidelity lead the pack, amassing billions of dollars in assets. The market for spot Bitcoin ETFs has experienced substantial growth, with daily trading volumes reaching record highs. Notably, there has been a net outflow from Gold ETFs, possibly indicating a shift in global investors’ preferences towards U.S. equity.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
