Coinbase, the popular cryptocurrency exchange, has acquired One River Digital Asset Management (ORDAM) in a move to expand its services and take advantage of the weak valuations of digital asset companies.
The financial details of the deal were not disclosed, but ORDAM will now operate as a fully-owned unit of Coinbase Asset Management.
ORDAM is a digital asset manager that provides institutional clients with exposure to digital assets through investment products. Eric Peters, the current CEO of One River Asset Management, will continue to serve as the chief executive of Coinbase Asset Management as well as the parent company of ORDAM.
In a blog post, Coinbase stated that both companies share an ethos grounded in prudent risk management, which has enabled them to navigate the recent market turmoil successfully.
This acquisition is a strategic move for Coinbase as it aims to expand its asset management services and take advantage of the current market conditions.
The digital assets market has been hit hard over the last year due to a string of high-profile bankruptcies and dour sentiment. The biggest blow to the sector came from the bankruptcy of Sam Bankman-Fried’s major crypto exchange FTX in November. This has led to increased regulatory scrutiny of the industry.
In a call with analysts, Coinbase’s Chief Executive Brian Armstrong acknowledged that the recent market downturn has affected the trading volume at the cryptocurrency exchange. In the fourth quarter, trading volume dropped to $145 billion (roughly Rs. 12,00,000 crore) compared to $547 billion (roughly Rs. 45,30,665 crore) a year earlier. However, he added that increased regulatory scrutiny would ultimately benefit Coinbase.
With the acquisition of ORDAM, Coinbase aims to offer a wider range of investment products to its institutional clients and expand its asset management services. This move will help Coinbase to stay competitive in the digital assets market and capitalize on the weak valuations of digital asset companies.
