Coinbase (COIN) has quietly crossed a threshold that Wall Street would immediately recognize: it has become, by its own definition, the only full-service prime brokerage in crypto.
John D’Agostino, chief strategist at Coinbase Institutional, said the definition of a prime broker still follows a familiar Wall Street checklist: trading, custody, financing, derivatives and cross-margining. In cryptocurrencies, he added, there is an additional layer: betting. “If you can do all that at scale, you’re great,” he said.
In stocks and fixed income, only a handful of companies, Goldman Sachs (GS), Morgan Stanley (MS) and Bank of America (BAC), truly qualify as full-service premiums, D’Agostino said. Smaller brokers can support funds, but they don’t offer the full stack. “A $100 million hedge fund isn’t getting everything from the top tier. They’re putting it together,” he said. “Large prime numbers do everything.”
Cryptocurrencies, until recently, worked in the same way, only more fragmented. Funds were pooled under the custody of one provider, derived from another and funded elsewhere. “You can synthetically replicate a core system by putting services together,” D’Agostino said. “But Coinbase is the only one that does everything natively.”
Coinbase is the largest US-based cryptocurrency exchange and a major infrastructure provider for institutional investors, offering trading, custody and financing services through its Coinbase Institutional unit.
Its flagship platform, Coinbase Prime, bundles these functions into a single system, allowing hedge funds and asset managers to trade, store and fund digital assets under one roof. Prime holds over $350 billion in assets under custody, around 12% of the total crypto market capitalization, and serves as custodian of over 80% of US bitcoin and ether ETF assets.
The company has become a key bridge between traditional finance and crypto markets, serving as custodian of a significant portion of American bitcoin. and ether (ETH) exchange-traded fund (ETF) assets and operating under an increasing regulatory framework, including oversight by New York regulators.
Cryptocurrency brokers offer institutional clients a suite of services designed to mirror traditional offerings in markets such as stocks and forex. They help funds manage counterparty risk and access liquidity in fragmented locations. Notable players include Coinbase Prime, Galaxy Digital (GLXY), FalconX, and Anchorage Digital.
cross margins
The final piece was put in place in March with the implementation of cross-margining between spot and derivatives positions, allowing market makers and institutional traders to reduce capital requirements by up to 10% to 20%. “That was the last pillar,” D’Agostino said. “Now we are the best by any measure, we replace cryptocurrencies with any asset class.”
Coinbase’s institutional platform processes approximately $236 billion in quarterly trading volume and supports more than 470 assets on more than 20 blockchains.
Beyond trading and custody, Coinbase manages a $1 billion loan portfolio and what D’Agostino describes as the industry’s largest listed derivatives footprint through its integration with Deribit. Its staking business spans 10 to 20 institutional-scale tokens, including dedicated products through Coinbase Asset Management.
“Those are the core components. There are companies that obtain good results in custody, others in derivatives, others in loans,” he said. “No one is solving all those problems in one place.”
That gap has persisted in part because of the relative size of cryptocurrencies. It represents approximately 3% to 5% of global equity and bond markets, and remains too small for large banks to fully commit.
Instead, D’Agostino hopes banks and traditional companies will partner. “Buy, build or rent,” he said. “Banks will rent. It’s cheaper and smarter to rent the top brand than to build a regular version.”
In the longer term, that calculation could change if cryptocurrencies grow to represent 20% or 30% of global markets. “Then we will see large-scale competition,” D’Agostino said. “But that’s years away.”
For now, the biggest threat is not Wall Street, but startups. “I’m less worried about JPMorgan than I am about the next Brian Armstrong,” he added.
Read more: Coinbase and Bybit are said to work together on the tokenization, custody and distribution of US stocks.
