What Is Cryptocurrency Custody

What is cryptocurrency custody

Cryptocurrency custody services

One of the biggest issues and concerns that every investor has, and especially those who work with large amounts of money, is storing their funds in a safe and secure way. Due to the fact that even the most secure wallets can be lost or hacked, a number of services which offer additional security have emerged over the last several years.

Trading journal spreadsheet crypto

These are known as cryptocustodians, and while they will likely be quite capable of securing their customers' funds, as always, it is important to know which of them are reputable and the best at what they do.

Crypto Custodians Explained

Before we start tacking the issue of which service is the best, we should first make sure that it is clear what users can expect from these services.

The first thing to note is that crypto custodians are largely focused on larger investors.

What is cryptocurrency custody

They tend to do with institutional investors, high net worth individuals, and others who wish to find a safe way to store their coins. They serve as trusted third parties which can secure other people's and companies' assets, and provide them with a peace of mind, instead of constantly having to worry about their funds' safety.

Another big advantage of using custodial services is that clients do not have to possess the technical knowledge regarding proper ways to store crypto, and secure their wallets and funds.

What is cryptocurrency custody

Custodians, on the other hand, are well aware of the most advanced methods of doing so, which they apply to prevent hackers or malicious threats from accessing the funds they are responsible for.

In the end, these service providers started gaining more popularity, and a lot of them appeared as a result.

Which Are The Best Crypto Custody Providers?

BitGo

BitGo is considered to be one of the best, if not THE best crypto custody service providers in the world.

The company supports more than 100 cryptocurrencies, and it has been in business since 2013.

Cryptocurrency Custody Solutions

It mostly offers cold storage solutions (keeping the funds offline), multi-user accounts, and it has advanced custody policy controls.

Coinbase

Next, there is Coinbase, which is the largest and most popular crypto exchange in the US, in addition to being a wallet and a custodian.

In fact, its custody service is a relatively recent addition, which was launched only last year. Many claim that Coinbase believes that institutional investors are about to go crypto, which is why the exchange started providing this type of services.

It is already well-known in the US, and if it starts working as a custodian as well, it will likely attract many of the soon-to-arrive institutions.

DACC (Digital Asset Custody Company)

DACC is a brand new custodian, launched in 2018 as well. Just like Coinbase Custody, it was designed in order to attract and serve institutional investors.

Bitcoin 2019: Examining the Future of Custody

It offers excellent security solutions, and it guarantees the security of their clients' digital assets. In addition, it offers storage solutions that include non-stop customer support, regular reports on the condition of customers' assets, insurance, and more.

Gemini

Gemini is yet another well-known cryptocurrency exchange which was launched by the Winklevoss twins.

It is fully regulated, US-based exchange that has also decided to start acting as a custodian in order to meet their clients' demands.

What is cryptocurrency custody

In fact, its custody service is known for its low cost, and it currently supports five coins (BTC, LTC, ETH, BCH, ZEC).

itBit

itBit is an older exchange, originally launched in 2012.

It is headquartered in New York, and it also acts as a regulated custodian.

What is cryptocurrency custody

Its clients are located all around the world, and its services include regular reports on the state of clients' assets, advanced asset protection, as well as holding capital reserves against customer deposits. Right now, this service also only supports five digital currencies, although it is possible that this number will change to include additional coins in due time.

Kingdom Trust

This is another institutional custodians that already has a lot of experience in working with hedge funds, banks, RIAs, family offices, and others who are interested in investing in crypto.

Which Are The Best Crypto Custody Providers?

It offers a number of benefits and security features, the most important of which is insurance for deposited assets, which has made many quite confident in the services' ability to protect funds.

Xapo

Finally, there is Xapo, which is known as one of the oldest Bitcoin wallets on the market.

It also acts as a custodian, and it allegedly holds as much as 7% of all circulating Bitcoin in its Switzerland-based vault. This is a company headquartered in Zug, and it offers numerous security features.

What is cryptocurrency custody

Xapo is also very well-funded, and many see it as one of the top BTC firms in the world.

Does Crypto Custodianship Have A Future?

According to recent reports, institutional investors, and even Wall Street, in general, are becoming more and more open towards cryptocurrencies.

Projects like the Bakkt exchange are one of the big reasons for this, as they are specially designed to attract institutions to crypto, while Bitcoin ETFs if approved, would reduce the security risks of owning coins.

Cryptocurrency custody services

Once institutions start getting involved with digital currencies, it is a small step from ETFs to actual crypto ownership.

When this happens, most of them are expected to turn to custodians, which means that this type of service can certainly have a bright future ahead.

Meanwhile, some institutional investors are already deeply involved with crypto space, which indicates that a lot of custodians already have more than a few clients. In 2019, however, the majority might decide to follow this trend, which will have positive consequences for the entire crypto industry.

Online forex brokers in pakistan