Institutional investors have been pouring into the crypto market, and it appears that trend has changed the makeup of Coinbase's business.
Known for being the poster child of crypto retail trading in the US, Coinbase has seen the volumes contributed to its marketplace from retail users shrink since 2018, according to data compiled from its S-1.
The percentage of retail volumes as a percentage of overall volumes fell from 80% during the first quarter of 2018 to just 36% in the final quarter of 2020.
Here's a passage from the S-1 describing the trend:
"Retail Trading Volume is more influenced by Bitcoin price and Crypto Asset Volatility than institutional Trading Volume, and we have experienced lower period over period fluctuations in volume from institutions. As institutional trading increases, we expand the number and types of crypto assets we support, and the utility of crypto assets expands, and we expect the correlation between Bitcoin price, Crypto Asset Volatility and Trading Volume to decrease."
Indeed, the decrease makes sense against the backdrop of the market.
Coinbase has made a big push into the institutional market through its prime brokerage offering, helping firms like Tesla and MicroStrategy purchase billions of dollars worth of bitcoin.
Coinbase's Brett Tejpaul said Wednesday the firm has executed "nine and ten figure trades for some of the largest institutions in the world," without disclosing specific names.