Sources say Coinbase plans to shift its institutional efforts away from Wall Street firms like Goldman Sachs to crypto funds and crypto-native firms
For many crypto enthusiasts, mid-2018 feels like a lifetime ago. — In those heady days, crypto's market capitalization stood at $300 billion … Tweets: @ncweaver , @fintechfrank , and @daveweisberger Tweets: Nicholas Weaver / @ncweaver : Translation: Wall Street has woken up and realized that it is a shitstorm, with no intrinsic value, so Coinbase is left trying to find rubes outside of the Wall Street world. http://twitter.com/... Frank Chaparro / @fintechfrank : The inside story of the Coinbase crypto OG and Wall Street guard power struggle Coinbase, the San Francisco crypto exchange, is making a pivot back to its crypto roots and away from Wall Street http://www.theblockcrypto.com/ ... David Weisberger / @daveweisberger : Fascinating story depicting the clash of cultures between Financial markets and Crypto. Whoever navigates this best, will be the biggest winners... http://twitter.com/...
Context & Ripple Effects
At the peak of the mid-2018 bull run, when crypto's market capitalization stood at $300 billion, Coinbase built its institutional ambitions around winning over Wall Street incumbents like Goldman Sachs. By January 2019, with the market deep in a drawdown, sources tell The Block that plan has failed: the exchange is redirecting its institutional sales effort toward crypto funds and crypto-native firms instead.
The subsequent record makes clear this was a cycle-driven retreat rather than a permanent verdict. Once trading volumes recovered, Coinbase reversed course — hiring Wall Street traders and deploying its own capital in 2021, then buying One River, an asset manager serving pension funds and other institutions, in 2023.
First-order effects
- Goldman Sachs and other Wall Street firms lose their designated crypto on-ramp at Coinbase, leaving the exchange dependent on crypto funds for institutional volume during a bear market.
Second-order effects
- When retail revenue rebounded, Coinbase had to buy back the institutional relationships it abandoned — first staffing up with Wall Street traders, then acquiring One River outright — paying twice for the same client base.
Third-order effects
- If the pattern holds, crypto exchanges' institutional strategies will keep oscillating with the market cycle, and traditional finance's entry into crypto will arrive through acquisitions of crypto-native managers rather than organic partnerships.
The trend: Crypto infrastructure companies alternate between courting Wall Street and retreating to crypto-native clients as the market cycle dictates, with each reversal raising the cost of rebuilding institutional trust.