Coinbase has excitedly announced its decision to take over Tagomi, an electronic Cryptocurrency brokerage. On Wednesday, the UK based Digital Assets Exchange made it explicit that the move is to enable the expansion of services for institutional patrons.  

A Blog post mentioned the acquisition as capping off a period of strong institutional focus for the exchange since the world’s most distinguished professional investors and funds are paying growing attention to digital assets.

In a Tweet, Brian Armstrong, CEO at Coinbase, welcomed Tagomi to the Coinbase Team. “The institutional space in Crypto is growing quickly – this will help us continue to serve our institutional customers,” he wrote. 

Coinbase acknowledged its effort for almost a decade in building one of the most esteemed brands in Cryptocurrency, which offers clients the best in trading and custody platforms. At this period, It is their conviction, some of the world’s leading hedge funds and macro investors are entering the market looking for the appropriate infrastructure through which to engage with Cryptocurrency.

The statement strongly highlighted: 

“This is why we’re excited to announce that we’ve agreed to acquire Tagomi, the leading crypto prime brokerage platform. The acquisition will bolster our offerings for advanced traders and the most sophisticated crypto investors.”

Institutional Adoption 

The Digital Asset Investment Report 2020 released in March unveiled that 88 per cent of $503.7 million invested in digital assets at Grayscale in the first quarter of 2020 came from institutional investors dominated by Hedge Funds. Meanwhile, the total investment in the third quarter of 2019 was $254.8 million. 

In the same vein, Coinbase recognises an increasing demand of Cryptocurrency from institutional investors in the past year, which is driving enormous growth in custody offering and increased volumes on the trading platforms. In February, the exchange introduced advanced specialities like margin trading for institutional investors and innovative tools to assist investors to separate their trading approaches on Coinbase Pro. 

Coinbase again hinted that the recent hiring of Brett Tejpaul as Head of Institutional Coverage was in the same direction of expanding services to big clientele, which they referred to as ‘The Next Phase Of Our Institutional Strategy’.  Therefore, the acquisition of Tagomi is going to bring to completion of the company’s “product suite for the fast-growing institutional trading market.”

It further described: 

‘It will allow us to offer custody, professional trading features, and prime brokerage services on one platform, giving sophisticated investors the seamless, powerful trading experience they have come to expect in equities and FX markets.”

About Tagomi 

Back by Peter Thiel, Tagomi launched as a prime broker in Cryptocurrency with trading, custody, margin, lending, shorting, staking and financing in one account almost two years ago. It is the 18th firm to receive BitLicense as part of the New York State Department of Financial Services (NYDFS) regulation of virtual currency businesses.

According to Coinbase, Tagomi has become the platform of preference for several advanced traders, hedge funds, and family offices, such as renowned names like Paradigm, Pantera, Bitwise, Multicoin, and many others. The Post noted:

“The company has also built out an executive team with a rare blend of traditional financial services and crypto experience, led by co-founders Greg Tusar, Jennifer Campbell, and Marc Bhargava. The Tagomi bench brings experience from leading firms like Goldman Sachs, Citadel, KCG, Tower Research, and USV.”

Both Parties Expressed Excitement 

Tagomi seems to be exhilarated about the deal just like Coinbase. A Tweet from their official account sighted by QT stated:

“Excited for the next chapter and to be joining forces with @coinbase. Incredibly grateful to the Tagomi team, clients, and investors who helped get us here!”

Coinbase also expressed how proud they feel to establish the foundation for the subsequent surge of Cryptocurrency investors by onboarding the foremost electronic prime brokerage in virtual currencies. Though the world is in a moment of uncertainty, the digital asset exchange deems it crucial to fulfilling their mission of building the crypto-economy. 

“We recognize that the journey is only just beginning, but we’re excited to be builders, and we welcome Tagomi to our mission,” the Coinbase Blog continued. However, the post pointed out that the acquisition is governed by customary closing requirements, which include regulatory endorsements, and is anticipated to close in late 2020.