Coinbase says institutional crypto holdings soared 170% in the first quarter as big players moved in

• Coinbase said institutional investors' crypto holdings on its platform surged 170% over Q1.

• The crypto exchange said it currently serves over 8,000 institutional clients.

• Bitcoin has recently tumbled and many investors are now highly wary of the asset.

Cryptocurrency holdings by institutional investors grew 170% on the Coinbase exchange in the first quarter, according to figures released by the company, as big players such as hedge funds and asset managers bought into bitcoin.

Coinbase said on Tuesday that institutional holdings on the platform - the biggest crypto exchange in the US - rose from $45 billion at the end of 2020 to $122 billion at the end of the March.

The data gives a sense of the pull that the soaring bitcoin price exerted on financial institutions in the first few months of 2021. Goldman Sachs, BlackRock and BNY Mellon were among the big names to say they'd be getting involved.

"Over time, we have seen a variety of factors pulling institutional investors into the space. These range from hedging against inflation, diversification of corporate balance sheets and the desire for broader engagement in the digital economy," said Drew Robinson, head of hedge fund sales at Coinbase.

The exchange, which went public earlier in 2021 and hit a $100 billion valuation, said it currently serves over 8,000 institutional clients, many of which use its offline crypto storage solutions.

However, bitcoin has plunged in recent weeks, denting the appeal of the token compared to more traditional assets. Shares in Coinbase have dropped more than 30% since the company listed on the Nasdaq.

Goldman Sachs said on Sunday it had held sessions with over 25 hedge fund chief investment officers and found bitcoin was their least favorite asset.

Coinbase is hoping it can keep institutions interested in bitcoin by launching a prime brokerage service that will help firms trade and safely hold cryptocurrencies, while providing data analytics and other services. It launched a beta version in May.