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Coinbase is still the reigning number one cryptocurrency exchange and broker in the US and won’t likely step down from that spot anytime soon. The San Francisco based firm has already shown some success in luring in institutional investors after onboarding a $20 billion hedge fund and has recently shown signs that it could soon plunge into security tokens, seen as the potential next big thing in the crypto market.

The arrival of institutional investors into the cryptocurrency market has been predicted by industry watchers. Many hope that the influx of big money could act as a catalyst and spur the crypto market for another bull run that might even be bigger than last year.

Anticipating this increased interest from institutional investors, crypto firms have been making big preparations to better serve this new breed of clients. In Coinbase’s case, the firm launched Coinbase Prime early this year, a prime broker business aimed at serving the unique needs of institutional clients such as hedge funds and money managers.

According to a Business Insider report, Coinbase Prime offers the services of a traditional prime broker. In addition, the crypto exchange might venture into margin finance by the end of this year. Basically, it will be some kind of lending/financing facility, that institutional investors can tap into for additional capital to fund their crypto trading activities to maximize returns.

Commenting on Coinbase’s plans, Greenwich Associates’ consultant Richard Johnson said:

“Coinbase is pursuing a lot of different initiatives that make sense and take it closer to or are more similar to traditional finance: custody, financing, lending, security tokens, and the institutional portal. They have the resources to fund them and will surely have some successes.”

Just like other crypto firms, Coinbase is also busy looking for top talents from major stock exchanges to tap into their knowledge and expertise in handling the needs of institutional investors. For instance, former NYSE cohead of institutional sales Christine Sandler and former Barclays employee Hunger Merghart were already hired by the crypto exchange.

Coinbase’s strategy is now starting to show some success. The firm already managed to lure an unnamed $20 billion hedge fund via its Coinbase Prime business. It is now targeting other large funds to try out its platform.

But America’s biggest crypto exchange is not resting on its laurels at all as it could be on the cusp of offering a new type of service or product.  According to Venture Beat, Coinbase may be offering security tokens soon after the company announced that its acquisition of Keystone Capital Corp was given the go signal.

The acquisition would allow Coinbase to “start offering cryptocurrencies defined as securities by the SEC,” also known as security tokens. This, in turn, could potentially extend the reach of cryptocurrencies as investors that normally deal only with securities can now be tapped.

One potential security token that might be offered by Coinbase in the future is the tZERO token. However, investors can expect a variety of options should the service push through as there is a vast potential for security tokens — as any asset can be tokenized. For instance, real estate, commodities, equity and even debt can theoretically be packaged into security tokens.

Coinbase Lures in the Big Boys, Might Start Offering Security Tokens Soon was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.

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