Cryptocurrency exchange Binance is challenging the world of traditional finance to increase its appeal to customers.
Binance is the first to open up its Capital Connect platform to wealthy individuals, allowing them to compare and invest in professional strategies through a platform that was previously limited to institutional investors. Users will now be eligible if they meet financial requirements, such as having at least $1 million in assets.
Binance VIP and institutional head Kathryn Chen told CNBC that retail investors “want access to Capital Connect.” “This is really what we’re doing to meet their needs.”
Capital Connect is built on Binance’s portfolio account infrastructure and handles features such as management fees, performance fees, and risk metrics, and allows trading teams to manage investment strategies, Chen said. He compared this setup to separately managed accounts in traditional finance, where investors can allocate to strategies without the trading team setting up a separate fund vehicle.
Traditional financial institutions have continued to expand their digital asset offerings as they compete for the funds of the wealthy. This has turned the tables, with one of the crypto industry’s largest and most established companies working to appeal to wealthy investors looking for options across different strategies and asset classes.
Binance said it has observed that while accredited investors focus on the trading team’s track record and standardized performance data, the team itself tends to prioritize research and strategy development over fund management and other operations.
Capital Connect had 212 portfolios from 77 professional trading teams as of September, up from 106 portfolios and 35 teams in May.
Beyond cryptocurrencies
Although Capital Connect started with a crypto-only strategy, Chen said more trading teams have since added traditional financial products to their strategies. The company says its team ranges from traditional asset managers to crypto-native quantitative firms, with many active in both markets.
Binance is also expanding its services related to traditional financial assets, such as 24-hour perpetual futures related to both pre-IPO and listed companies.
