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Institutional Crypto: Kraken Pounces on Bitcoin ETF Momentum with Dedicated Brand

Kraken makes a strategic move into institutional services

Kraken, a leading crypto exchange, announced the launch of its new division tailored for the needs of asset managers, hedge funds, and affluent investors. This move comes on the heels of the U.S. green-lighting spot Bitcoin ETFs. Kraken's institutional arm combines its existing services—spot and over-the-counter trading along with crypto staking options for international clients—under a singular, dedicated brand.

Tim Ogilvie, the co-founder of Staked, who has stepped in as the head of Kraken Institutional following its acquisition by Kraken in December 2021, articulated the momentum behind this strategic direction. 

Ogilvie remarked:

"Institutional adoption of crypto is growing rapidly,"

This division aims to carve a niche in the competitive landscape by offering 'qualified custody' services through Kraken Financial, a Wyoming-chartered Special Purpose Depository Institution, ensuring a robust and secure investment framework for institutional clientele.

Kraken's institutional brand not only seeks to leverage the current market dynamics but also to set a precedent for the quality and range of services offered to sophisticated investors. Ogilvie's vision for this initiative is clear: to facilitate and foster the growth of crypto businesses among institutional participants.

The growing appeal of Bitcoin ETFs among institutional investors

The recent approval and launch of nine Bitcoin ETFs have marked a significant milestone, drawing an aggregate inflow of $6 billion since their inception in January. This surge reflects an average daily inflow of $196 million, culminating in a record-breaking daily volume of $2.4 billion. 

Despite Grayscale experiencing outflows, the balance has been overwhelmingly positive, with BlackRock and Fidelity's ETFs capturing significant inflows, highlighting the diverse but discerning appetite of institutional investors. Tim Ogilvie's observation resonates profoundly within this context: 

"The recent ETF approval has spurred broader institutional demand." 

Coinbase acting as the custodian for eight of the ten newly launched Bitcoin ETFs, the competitive landscape is ripe with opportunities for strategic positioning and growth. The launch of Kraken Institutional, coupled with its qualified custody service backed by Kraken Financial, positions the exchange as a significant player in catering to the nuanced needs of asset managers, hedge funds, and high net-worth individuals looking to navigate the crypto ETF space.