Bitcoin believers argue the famous crypto-currency would be more stable—and more valuable—if only hedge funds and other institutional investors would get with the program and buy some. But so far, many big fish have stayed away—in part because bitcoin doesn’t provide the financial products and regulatory compliance they require.
This could start to change, however, as more companies shape their services for traditional investors that want exposure to bitcoin and other digital currencies. The latest examples comes from San Francisco-based Coinbase, whose GDAX exchange—a trading platform backed by the New York Stock Exchange, venture capitalists like Andreesen Horowitz and others—announced on Monday the launch of margin trading.
The new feature, which lets investors leverage their bets on bitcoin by a factor of three, is significant because the ability to trade on margin is widely used when trading traditional assets, and it is something institutional investors expect,