With the emergence and sustenance of the cryptocurrency industry, companies are now allocating their interests in a new suite of services – custody of cryptocurrencies. The move comes in the undeniable wake of established and upcoming firms alike from traditional sectors expressing their interest in cryptocurrency investing, seeking credible choices for storing their digital assets.
Custodial Services A Rising Business Sector
Filling this gap is Palo Alto-based bitcoin wallet provider BitGo, which unveiled its new custodial services on May 14, 2018, intending to rope in institutional investors with an eagle-eye on the cryptocurrency market.
This new venture has emerged after BitGo acquired Kingdom Trust, a U.S.-qualified custodian of traditional financial assets, in January 2018. It perhaps took inspiration from the same, just in the crypto domain instead of traditional finance.
According to the head of product at BitGo, Tracy Olsen, the custodial services will be classified into three different tiers, in order to cater to varied needs and risk-tolerance. She also informed that the company aims at being a 360-degree supplier of security solutions, instead of a mere custodian firm.
The three services tiers are:
- Qualified Custody (in alliance with Kingdom Trust),
- Institutional Custody,
- Self-managed custody.
Olsen did not dive into the details of the total value of assets it holds, but revealed that 15 percent of the total bitcoin transactions take place through BitGo’s wallet.
Speaking about larger institutional firms, Olsen added that they consider bitcoin as a lucrative investment, and look towards widening their portfolios with coins like ether, ripple, and other digital currencies.
BitGo experiences a high demand from customers for a wide variety of coins. They assess every single one of them for feasibility in the market and prioritize them, based on it.
Currently, BitGo currently offers its custodian service for over 20 cryptocurrencies. However, Olsen aims at ‘absolutely’ sky-rocketing that figure by the end of 2018.
BitGo Aims to Allure Wall Street Firms
The onset of this announcement looks at prospectively re-launching BitGo as one of the few crypto startups that cater to those looking to do business on Wall Street.
There is a definite surge in interest in custodial services, propel by the recent interest in the sector by institutions such as Goldman Sachs, which announced the launch of a bitcoin futures trading desk on May 2, 2018.
Companies in the crypto-security sector are seeking venture funding as well, with firms like Ledger and Coinbase reportedly approaching Venture Capitalists to grow and develop custody products to big clients.
In conclusion, although the cryptocurrency is often seen as being in relation with the underworld or even being illegal, companies and people are slowly changing this mindset about and looking beyond the negatives of investing in this asset segment.