In the last year, the failures of crypto companies like FTX, Celsius, and BlockFi, as well as recent bank collapses, eroded belief in financial systems. A flight to safety has begun as investors of all sizes worldwide seek reliable and secure crypto storage.
Regulated custodians are essential for ensuring the security of digital assets. They provide services such as segregated accounts, protection from financial instability, cold storage of keys, advanced security technology, and insurance against theft, loss, or misuse. Recently, several institutions have announced their plans for crypto, bringing new interest, capital, and participants. Notably, BlackRock filed for permission to create a Bitcoin ETF, which is a strong signal to the rest of the financial world that Bitcoin is here to stay.
When selecting a custodian, investors must consider their own personal risk analysis. It is important to ensure that the custodian can provide the necessary safeguards to protect investor assets. The lessons learned in the past 18 months have highlighted the need for strong custodial practices. As the digital asset industry continues to grow, reliable infrastructure is essential for its success.