Cryptocurrency exchange Binance is taking on the world of traditional finance as it seeks to increase its appeal to customers.
Binance is opening its Capital Connect platform to wealthy individuals for the first time, allowing them to compare and invest in professional strategies through a platform previously limited to institutional investors. Users will now be eligible if they meet financial requirements, including holding at least $1 million in assets.
Individual investors “want access to Capital Connect,” Catherine Chen, head of Binance VIP and institutional, told CNBC. “This is really us answering their demand.”
Capital Connect is built on Binance’s Portfolio Account infrastructure, which handles functions including management and performance fees and risk metrics, while trading teams manage the investment strategies, Chen said. She compared the setup to separately managed accounts in traditional finance, with investors able to allocate to a strategy without the trading team setting up a separate fund vehicle.
Traditional financial institutions have been both competing for high-net-worth money and continuing to boost their offerings in digital assets. This turns the tables on them, with one of crypto’s biggest and most established companies working to appeal to wealthy investors who may want options with a range of strategies and asset classes.
Binance has observed qualified investors focusing on trading teams’ track records and standardized performance data, while the teams themselves tend to prioritize research and strategy development over fund administration and other operations, according to the company.
Capital Connect had 212 portfolios from 77 professional trading teams as of September, up from 106 portfolios and 35 teams in May.
Moving beyond crypto
Capital Connect started with crypto-only strategies, but more trading teams have since added traditional finance instruments to their strategies, Chen said. The teams range from traditional asset managers to crypto-native quantitative firms, with many operating across both markets, according to the company.
Binance has also been expanding its offerings tied to traditional financial assets, including around-the-clock perpetual futures linked to both pre-IPO and publicly traded companies.
