Coinbase (COIN) has quietly achieved what Wall Street would immediately recognize: it is the only full-service prime brokerage in cryptocurrency, according to its own criteria. John D’Agostino, head of strategy at Coinbase Institutional, explained that a prime broker follows a traditional Wall Street checklist consisting of trading, custody, financing, derivatives, and cross-margining. In addition to these, he noted an extra layer unique to crypto: staking. ‘If you can do all of those at scale, you’re a prime,’ said D’Agostino.
In the realms of equities and fixed income, only major firms like Goldman Sachs (GS), Morgan Stanley (MS), and Bank of America (BAC) are considered true full-service primes. Smaller brokers may assist funds but lack the comprehensive service suite. ‘A $100 million hedge fund isn’t getting everything from the top tier. They’re piecing it together,’ he remarked. ‘The big primes do everything.’
Previously, crypto markets were similarly fragmented, with funds combining services like custody from one provider and derivatives from another. ‘You can synthetically replicate a prime by patching services together,’ D’Agostino noted. ‘But Coinbase is the only one doing all of it natively.’
Coinbase is the largest U.S.-based cryptocurrency exchange and provides substantial infrastructure for institutional investors, offering trading, custody, and financing through its Coinbase Institutional division. Its flagship platform, Coinbase Prime, integrates these services into a single system, allowing hedge funds and asset managers to trade, store, and finance digital assets under one roof. Prime manages over $350 billion in custodial assets, roughly 12% of the total crypto market cap, and serves as custodian for more than 80% of U.S. bitcoin and ether ETF assets.
Coinbase acts as a significant bridge between traditional finance and crypto markets, holding a substantial share of U.S. bitcoinBTC$77,984.55and ether (ETH) exchange-traded fund (ETF) assets while operating under an evolving regulatory landscape, including oversight from New York regulators.
Crypto prime brokers offer institutional clients a suite of services that mirror those in traditional markets like equities and FX. They help funds manage counterparty risk and access liquidity across fragmented venues. Notable players include Coinbase Prime, Galaxy Digital (GLXY), FalconX, and Anchorage Digital.
The final piece was added in March with the rollout of cross-margining between spot and derivatives positions, allowing market makers and institutional traders to reduce capital requirements by 10% to 20%. ‘That was the last pillar,’ D’Agostino said. ‘Now we’re a prime by any standard, substitute crypto for any asset class.’
Coinbase’s institutional platform processes around $236 billion in quarterly trading volume and supports more than 470 assets across over 20 blockchains.
In addition to trading and custody, Coinbase operates a $1 billion lending book and maintains the industry’s largest listed derivatives footprint through its Deribit integration. Its staking business covers 10 to 20 tokens at an institutional scale, including specialized products through Coinbase Asset Management.
‘Deeply integrated services are core components,’ said D’Agostino, noting that while some firms excel in custody, others in derivatives or lending, no single entity solves all these problems. This gap persists partly because crypto’s market size is roughly 3% to 5% of global equities and fixed income markets, making it too small for major banks to fully invest.
D’Agostino predicts that banks will likely form partnerships rather than build in-house solutions. ‘Buy, build or rent,’ he said. ‘Banks will choose the cheaper and smarter option: renting from the best brand.’
Long-term competition could increase if crypto grows to 20% or 30% of global markets. ‘Then full-scale competition might emerge,’ D’Agostino noted. ‘But that’s years away.’
Currently, the greater threat comes from startups rather than Wall Street. ‘I’m less concerned about JPMorgan than I am about the next Brian Armstrong,’ he concluded.