Coinbase Reports ‘Tremendous Interest’ from Corporations Looking to Diversify Balance Sheets with Crypto
COIN’s share prices meanwhile jumped after Goldman Sachs called it “the best way to gain exposure to the expansion of the crypto-native ecosystem.”
Coinbase has announced the launch of the beta version of Coinbase Prime, a prime brokerage solution for institutional investors that provides custody, trading, data analytics, and prime services.
The leading US cryptocurrency exchange, which has over 8,000 institutional clients and $122 billion assets on the platform as of the end of March 2021, aims to further help financial institutions, institutional investors, and companies add crypto to their balance sheets.
“Institutional acceptance of crypto has grown at a breakneck pace,” noted Coinbase adding, “we’re seeing tremendous interest from corporations that are looking to diversify their balance sheets with crypto.”
Through Coinbase Prime, the company also offers staking and governance to institutions. Coinbase Custody actually supports more than 100 assets across 15 different blockchains.
Amidst this, a senior Goldman Sachs lobbyist has joined Coinbase as its new chief policy officer. Faryar Shirzad will join Coinbase next month, a new role for the exchange.
Shirzad spent 15 years at Goldman as a co-head of government affairs.
“As chief policy officer, Faryar will engage with lawmakers, regulators, and other policy experts to realize crypto’s full potential to fuel a more equitable financial system along with job creation, GDP growth, and innovation.”
Coinbase’s (COIN) share price also jumped to $242 this week after Goldman recommended buying its shares to ride the volatility in the cryptocurrency space.
The banking giant called Coinbase a “buy,” assigning it a 12-month price target of $306 per share, implying another 27% jump in its prices.
According to Goldman analysts, Coinbase is “the best way to gain exposure to the expansion of the crypto-native ecosystem.”
“If meaningful parts of the economy can transition to blockchain and crypto-native technology over time,” the analysts wrote in the Monday report.
“We see significant opportunity for [Coinbase] to benefit from its status as a critical element of the financial infrastructure for the ecosystem.”
The analysts point out that the company's security and regulatory compliance will bolster its growth while noting that,
“Subscription and services revenue has the potential to see outsized growth relative to the core run rate of the business as [Coinbase] rolls out additional ancillary services over time.”
Meanwhile, regulation of the crypto space, declining prices of crypto assets, lower volatility, and low commissioner rates are seen by Goldman as key risks for Coinbase.