Institutional money is growing the crypto space, says Coinbase vice president
- Coinbase VP Adam White says there is increased interest among institutional investors in the cryptocurrency space.
- “Institutional conversations have become more and more profound” over the past year, White says.
- The exchange announced it is considering adding five new tokens to its platform — depending approval — because of increased user demand.
- “What we’re seeing though, with institutions, is that they want absolutely the right regulatory structure around it,” White said.
Institutional investments in cryptocurrency are helping to grow the industry, Coinbase Vice President and General Manager Adam White told CNBC.
“What’s so unique about cryptocurrencies, and in many ways this asset class, [is that it] was driven by retail investors — not institutions,” White said on “Fast Money” Monday.
So it was surprising that his firm, a San Francisco-based digital currency exchange, has had “unprecedented” interest from institutional investors throughout 2017, he said.
The “institutional conversations have become more and more profound,” White said. In response, his firm has opened a New York office and launched new products and services.
Last Friday, Coinbase, which is also the largest cryptocurrency exchange in the U.S., announced it was considering adding five coins to its platform, including cardano, basic attention token, stellar lumens, Zcash and 0x. All five assets moved higher after the announcement.
“The idea of adding new assets is very simply: our customers want it,” White said.
But so far, none of the coins have been approved, and it’s not yet been determined if they are securities. The company said in a blog post on Friday that some of the assets may have limited functions, and may only be available in some countries.
The firm has previously been cautious about the addition of new tokens despite user demand, as the cryptocurrency universe endured increased regulatory scrutiny. Up until now, Coinbase has only listed four coins on its platform.
“We have a long-term vision for the space,” White said. “And we are focused on building the exchange, the wallet, the custodian, that allows capital to move into the space.”
Not everyone is as bullish on digital currency though. Investor and author Kevin O’Leary is bearish on cryptocurrency — especially bitcoin, which was priced around $6,655 Monday at 5:30 p.m. ET.
“But until you know with certainty if you’re an asset allocator and you’re running a sovereign fund or you’re doing a pension plan for some state. You’re not going to put a dime into this stuff,” O’Leary said on “Fast Money” Monday.
In order for cryptocurrency to be a lucrative investment, O’Leary said, investors need to know “it’s transparent; it’s compliant; and the regulators are on board.” “And then you’ll see real money. Right now it’s fringe.”
But White pointed out that those things don’t happen overnight.
“Those are the exact three things Coinbase is working on,” he said. “What we’re seeing though, with institutions, is that they want absolutely the right regulatory structure around it.”
“People are valuing these assets very differently,” White said. “Whether they’re crypto hedge funds or the retail investor. The core metrics that people look at though, are: What are the daily transactions? How much volume’s moving through it? How many people are building on top of it?”
“The end of the day these are open protocols that facilitate the kind of value, creation and movement,” he said.
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