Bitcoin exchange Coinbase opens Chicago office in bid to attract investors, local talent
Coinbase, a digital currency exchange based in San Francisco, has opened a Chicago office to be close to burgeoning digital currency markets, big investors and what its leaders say is a vast pool of local talent.
The appetite for bitcoin and other digital currencies has grown exponentially in recent years as they’ve gained legitimacy across the world. And while digital currency is still not widely used or understood by many average consumers, Chicago’s two main exchanges, the Chicago Mercantile Exchange and the Chicago Board Options Exchange, became the first traditional exchanges to trade the financial products late last year, lending credibility to bitcoin and its lesser-known digital brethren.
Coinbase is already one of the largest digital currency exchanges around the world. Coinbase’s Chicago office will serve as a central hub for some back-office technology behind the company’s products, said Paul Bauerschmidt, a former CME executive, who is leading the Chicago office.
“It’s similar to an exchange that you’d see with ICE (Intercontinental Exchange) or CME or CBOE,” he said.
Recruiting people who are able to build and maintain these complicated systems, especially with financial experience, is difficult in other cities, Bauerschmidt said.
“The talent that’s here in Chicago, you can’t find anywhere else,” he said. “And especially getting as many of the key staff as we need. It’s really exciting to be able to build it here.”
The Chicago office also will focus on courting institutional investors, which manage assets on others’ behalf, like banks, hedge funds, mutual funds or pension funds, Bauerschmidt said.
In concert with the Chicago launch, Coinbase is unveiling Coinbase Prime, a collection of tools and services specifically for those institutional investors. The products make it easier for these large investors to start trading and manage sophisticated trading systems, Bauerschmidt said.
The Chicago office currently has just six employees, but it plans to get that number up to 30 this year and reach 100 within three years.
Bitcoin’s initial trading value was just pennies in 2010, surging to more than $17,000 at one point in late 2017. It’s now trading at just under $9,000. At this point last year, a single bitcoin was worth about $1,800; two years ago it was $445.
Bitcoin was created in 2009 as an alternative to government-issued currency. A number of big companies accept it, from travel website Expedia.com to Subway sandwich shops and even online dating site OkCupid. But because it isn’t regulated by a country or other single entity like traditional currency, the price can be volatile.
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