Galaxy and Bakkt partner to enter prime brokerage business

Galaxy Digital and Bakkt are partnering to offer a “white-glove” service for large asset managers looking to buy and store Bitcoin. According to Bakkt head of custody business development, John Conneely, the partnership was put into place in response to increased demand from institutions over the last three months. With the partnership, institutional customers will only have to go through sign up once to work with both firms.

Why it matters:

• Deal activity in the prime brokerage space is on fire over the past couple months as crypto firms look to capitalize on increased institutional interest in Bitcoin. Just a couple weeks ago Coinbase acquired Tagomi, an institutional trading firm, and Digital Currency Group’s Genesis subsidiary acquired Volt, an institutional grade custodian. In February BitGo also entered the prime brokerage space with its acquisition of Harbor and recently launched its BitGo prime service.
• More broadly, the race to build a full-service crypto financial institution is in full swing. The lines between service providers are blurring as firms dip their toes into ancillary offerings outside their primary business.