Coinbase Bolsters Institutional Platform with One River Acquisition

Coinbase,
the leading US <a href=”https://www.financemagnates.com/terms/c/cryptocurrency-exchange/” class=”terms__main-term” id=”601e2e5f-0c28-4253-9ad4-5e6b251ba2fa” target=”_blank”>cryptocurrency exchange</a>, has acquired One River Digital Asset
Management, a cryptocurrency-focused institutional investment firm. The
acquisition marks a significant move for Coinbase as it continues to expand its
offerings for institutional clients.Coinbase Acquires Crypto Asset
ManagerWith the
acquisition, Coinbase will gain access to One River Digital Asset Management’s
institutional-grade investment expertise and technology, which will enhance its
own institutional <a href=”https://www.financemagnates.com/terms/t/trading-platform/” class=”terms__secondary-term” id=”f85800b2-ccf5-4f50-9e8e-780d32afc6f6″ target=”_blank”>trading platform</a>. Coinbase already offers a range of
institutional services, including custody, trading, and staking, but the
addition of One River’s capabilities will make it an even more attractive
option for institutional clients looking to invest in cryptocurrencies. After
the move, One River Digital Asset Management will change its name to Coinbase
Asset Management. ”We’re
thrilled to integrate One River’s investing expertise into Coinbase. One River
has pioneered institutional digital asset investing and we’re looking forward
to continuing their tradition of innovation,” Brian Armstrong, the CEO of
Coinbase, said in a blog post announcing the acquisition.One River
Digital Asset Management was founded in 2020 by a former Goldman Sachs partner, Sebastien
Bea and a former Traxis and Fortress executive, Eric Peters. The firm offers
institutional investors exposure to cryptocurrencies through a range of
investment products, including digital asset index funds and Bitcoin futures
trading strategies. After the early financing round in 2021, the company was valued
at $186 million, while becoming one of the then-largest BTC holders.The
acquisition comes at a time when institutional interest in cryptocurrencies is
growing. Many large institutional investors, such as hedge funds and asset
managers, are beginning to allocate a portion of their portfolios to
cryptocurrencies as a hedge against inflation and a potential store of value.
By acquiring One River, Coinbase is positioning itself to capitalize on this
trend and become a leader in institutional cryptocurrency investing.The terms
of the acquisition were not disclosed, but according to some industry sources, it
might be one of the largest acquisitions in the cryptocurrency industry to
date.Acquisition after
PartnershipCoinbase reported
about purchasing One River a year after the two companies <a href=”https://www.financemagnates.com/cryptocurrency/coinbase-partners-with-one-river-to-offer-separately-managed-accounts/” target=”_blank” rel=”follow”>announced their
mutual partnership</a> to offer separately managed accounts (SMAs). One River
announced the integration of a new product, ONE Digital SMA, on 13 February 2022.
The product is powered by Coinbase Prime technology and is designed to allow
institutional investors, particularly wealth managers, to access One River’s
trading expertise while holding all their assets directly on the Prime platform
(Coinbase Custody). This integration provides institutional investors with a
seamless and secure experience, streamlining their investment process.Coinbase has
been actively addressing the needs of institutional investors for some time
now. In December of last year, Coinbase <a href=”https://www.financemagnates.com/cryptocurrency/news/coinbase-prime-partners-with-enfusion-targets-institutional-investors/” target=”_blank” rel=”follow”>collaborated with Enfusion</a>, a
cloud-based portfolio management and risk system provider based in the
Netherlands, to offer institutional investors seamless cryptocurrency trading. Coinbase Beats Market
Expectations but Reports LossesTwo weeks
ago, the publicly-listed crypto exchange <a href=”https://www.financemagnates.com/cryptocurrency/news/coinbase-beats-market-expection-despite-drop-in-q4-transaction-revenue/” target=”_blank” rel=”follow”>reported a loss of $557 million in the
fourth quarter of 2022</a> as the net revenue plummeted 75 percent year-over-year
to $605 million. However, the quarterly revenue exceeded the market estimation
of $588 million.Further,
the latest net revenue strengthened from the previous quarter’s dip of $576
million, thus coming in about 5 percent higher. However, the losses widened in
the prior quarter.Apart from lowering
revenues, Coinbase is struggling with a lawsuit over the alleged
infringement of trademarks. <a href=”https://www.financemagnates.com/cryptocurrency/nanolabs-files-5-million-lawsuit-against-coinbase-over-nano-trademark/” target=”_blank” rel=”follow”>According to a legal filing submitted on 24
February 2023</a>, NanoLabs, the issuer of NANO, has claimed that Coinbase’s Nano
Bitcoin and Nano Ether futures contract products, which have been available
since June 2022, are infringing on trademark rights owned by the company. The
filing was submitted in a Northern California District Court.