Coinbase is clocking in record volumes via its prime brokerage service and over-the-counter trading desk

Coinbase is best known for its exchange business, but the firm’s less talked about operations in over-the-counter (OTC) trading and prime brokerage just had their best quarter ever, according to data analyzed by The Block. 

The Block estimates that OTC and prime brokerage volumes reached an all-time high of nearly $88 billion in the fourth quarter of 2021. That came during the same quarter that Coinbase also announced a full-scale launch of its prime business — a move that fully integrated brokerage firm Tagomi, which it acquired in 2020. 

The $87.9 billion figure represents the difference between the volume captured by public data sources like CryptoCompare last quarter and the total volumes Coinbase reported in its Q4 earnings report. Coinbase reported $547 billion in volume in its most recent earnings, while CryptoCompare only captured $459 billion for the same period. Coinbase confirmed the gap is filled by prime and OTC.

The growth in this number reflects the steady march of new institutional entrants to the crypto market. Trading OTC or via a prime brokerage provides institutions with a way to access deeper pools of liquidity without revealing their activity to the broader market.

In its Q4 earnings, Coinbase said that in 2021 its institutional customer base had by 50% relative to 2020 and that the firm had doubled the number of clients using its custody service.