Storing digital assets securely is one of the trickier aspects of investing in digital currency. As a result, there are now several bitcoin and crypto custodian services to make digital currency investing more accessible and secure, especially for larger investors.
The following guide will explain what crypto custodian services are, and highlight the top providers in this new market segment of the digital asset industry.
What Are Crypto Custodians?
Crypto custodial service providers enable larger investors, such as high-net-worth individuals and institutional investors, to securely store digital assets with a trusted third party.
Considering the technical aspects of private key safekeeping, larger investors prefer to leave the security of their digital assets to custodial services, to better ensure that their funds can’t be accessed by hackers or other malicious actors.
By using a custodian, investors are able to avoid the technical side and assuredly store their digital assets in a safe place. Due to increasing demand from institutional investors, more and more bitcoin/crypto custodian service providers have emerged over the past few years.
In this section of our guide, we have rated and reviewed the best crypto custodians to help you choose which service provider may be the right solution for you and your investment needs.
Top Bitcoin Custodians
|Custodians||Company Launch Year||Numbers of Assets||Fees||Score|
|Coinbase Custody||2012||90+||$0 - 10,000 set up fee and 0.5% p.a.||4|
|Gemini||2014||5||0.4% p.a. and a $125 withdrawal fee||4|
|Anchorage||2017||38||0.1% per transaction||3|
BitGo is a market leader in digital asset storage since the company launched in 2013. As a qualified custodian, BitGo provides custodianship for over 100 digital currencies and tokens by leveraging institutional-grade custody policy controls, cold storage solutions, and customizable multi-user accounts.
Leading bitcoin exchange and wallet provider Coinbase launched its custody service – targeted at institutional investors in mid-2018. Coinbase Custody enables investors to securely store their digital assets through its partnership with a regulated broker-dealer.
Gemini is a regulated digital asset exchange based in the US that also provides a custodial service to its professional clients. Gemini offers its low-cost custody service to store bitcoin, Litecoin, Ether, Bitcoin Cash, and Zcash in a fully regulated and legally compliant manner.
Kingdom Trust leverages its experience as an institutional custodian to provide digital custodial services for banks, hedge funds, RIAs, and family offices that want to invest in digital assets without storing them themselves. Moreover, Kingdom Trust ensures its deposited assets for added security for its customers.
New York-based bitcoin exchange itBit, now owned by Paxos, provides a regulated custody service as a New York State Trust Company for qualified investors. itBit provides personalized services for its global client base, which includes asset protection, regular reporting, and holding mandatory capital reserves against customer deposits.
Founded in 2017, Anchorage launched what is considered to be one of the most advanced cryptocurrency custody services in terms of security. Based in the U.S., the firm serves both institutional and high-net-worth retail investors. Anchorage also offers trading, staking, governance, and financing services.
Bakkt is a digital asset futures exchange founded by the Intercontinental Exchange (ICE), which was also responsible for creating the New York Stock Exchange (NYSE). In late 2019, after the acquisition of Digital Asset Custody Co., the Bakkt Warehouse custody service was launched to institutional investors. The service boasts top-level security as well as protecting funds with a $125 million insurance policy.
The Future of Digital Asset Custodianship
Wall Street’s newfound openness toward digital currencies as an investment asset class will likely result in more and more bitcoin custodian solutions emerging.
Fund managers will continue to become more open to investing in bitcoin if they can store their investments with regulated custodians in the same way they can for stocks and bonds. Hence, the more this market segment grows, the more institutional investment you should expect for bitcoin and other digital currencies.
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