Bernstein says custody services are the foundation for institutional crypto adoption

01/17 11:56

According to CoinDesk, the collapse of crypto exchange FTX has led to a greater focus on using regulated custodians, and the custody revenue opportunity could grow to $8 billion by 2033 from less than $0.3 billion today, Bernstein said in a research report on Tuesday. “Crypto custody is the foundational enabler for institutional adoption,” analysts Gautam Chhugani and Manas Agrawal wrote, adding that “unlike legacy custody, crypto custody is all about securing the private key,” which makes it a more technological endeavor. Post-FTX, Bernstein expects a jump in “crypto custody penetration” with existing investors, and a sharp growth in custody services in the medium-term driven by increased institutional participation in digital asset markets. The broker says there is a large revenue opportunity for crypto firms and banks to provide Wall Street-like custody, market-making and prime broking services to investors entering the cryptocurrency market.
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