Kraken, a prominent crypto exchange, has unveiled a new division dedicated to offering specialized services to institutions, targeting a portion of the spot Bitcoin (BTC) exchange-traded fund (ETF) market.
The announcement, made on Feb. 27, introduces Kraken’s new institutional brand, consolidating its existing institutional offerings such as spot and over-the-counter trading, along with crypto staking (excluding the United States). These services are aimed at asset managers, hedge funds, and high-net-worth individuals.
Tim Ogilvie, the co-founder of Staked, which was acquired by Kraken in December 2021, will head Kraken Institutional. Ogilvie emphasized the rapid growth of institutional adoption in crypto, citing the recent ETF approval as a catalyst for broader institutional demand.
The newly launched Bitcoin ETFs have attracted significant inflows since January, with an average daily inflow of $196 million and a recent record daily volume of $2.4 billion. While Grayscale’s ETF has experienced outflows, others like BlackRock’s and Fidelity’s have offset the selling with inflows.
Kraken Institutional plans to introduce a “qualified custody” service backed by Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution. This move positions Kraken to compete directly with established institutional service providers like Coinbase Institutional and Coinbase Prime, as well as Binance Institutional, which offers tailored solutions for institutional users.
Kraken’s foray into institutional services aligns with the growing demand from institutions entering the crypto space. With the potential for strong earnings, particularly in custodial services for newly launched Bitcoin ETFs, Kraken aims to capture a share of the institutional market alongside its competitors.
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