[197 Pages Report] The Crypto Custody Provider Market size was estimated at USD 1.77 billion in 2023 and expected to reach USD 2.99 billion in 2024, at a CAGR 79.86% to reach USD 108.37 billion by 2030.
The crypto custody providers market encompasses firms that offer secured storage and safety services for cryptocurrencies and digital assets. The crypto custody providers safeguard the cryptographic keys that grant access to the digital assets to prevent unauthorized use and reduce the risk of theft. The increasing crypto adoption is contributing to increasing need for secure custody services. The surge in institutional investors entering the cryptocurrency space requires robust custody services to handle large volumes of digital assets. The innovations in encryption and blockchain technology enhance the security and functionality of custody services. However, high-profile thefts and hacking incidents continue to pose a threat to market growth. The absence of uniform global regulations can hinder market expansion and consumer confidence. Moreover, integration with traditional financial systems to broaden market accessibility and appeal is generating significant growth potential in the market. The development of insurance products to provide additional security to the stored assets is anticipated to generate significant market growth.
In the Americas region, the United States and Canada represent a significant market for crypto custody solutions due to a sizable number of institutional investors becoming increasingly involved in the crypto space. The stringent regulatory frameworks and the presence of major players in the Americas region influence customer behavior towards prioritizing security and compliance with regulatory standards. Within the European Union, a uniform regulatory landscape is expected to stir consumer interest and trust further. European clients are typically attentive to compliance and are inclined to engage with custodians offering multi-jurisdictional regulatory assurance. The Middle East region has shown a burgeoning interest in crypto assets, with countries such as the UAE positioning themselves as crypto-friendly hubs. Africa's unique position as a largely untapped market with a rising fintech scene presents tremendous opportunities for market growth. In the APAC region, rising investments into crypto custody technology drives operational efficiency, security, and compliance with emerging regulatory guidelines. The growing interest in digital assets among consumers in the APAC region suggests a potential crypto custody solutions market.
The market dynamics represent an ever-changing landscape of the Crypto Custody Provider Market by providing actionable insights into factors, including supply and demand levels. Accounting for these factors helps design strategies, make investments, and formulate developments to capitalize on future opportunities. In addition, these factors assist in avoiding potential pitfalls related to political, geographical, technical, social, and economic conditions, highlighting consumer behaviors and influencing manufacturing costs and purchasing decisions.
- Market Drivers
- Growing Utilization of Digital Asset Custody Services for Security and Storage of Cryptocurrency
- Increasing Number of Cyberattacks on Cryptocurrency Exchanges
- Market Restraints
- Lack of Awareness About the Benefits Associated with Crypto Custody
- Market Opportunities
- Introduction of New Digital Asset Custody Platforms and Services
- Partnerships Between Financial Institutes and Crypto Custody Service Providers
- Market Challenges
- Regulatory Uncertainty and Potential Risks Associated With Crypto Custody
Type: Growing need for self-custody options to achieve privacy and security
Self-custody solutions refer to methods for individuals or institutions to store their own cryptographic keys, which are used to access and also control their digital assets. This type of custody is characterized by the user's direct and sole control over their cryptocurrency holdings. Third-party custody, on the other hand, involves entrusting cryptographic keys and digital assets to a specialized entity that offers security and asset management services. This type of custody is popular among institutional investors and users who prefer a hands-off approach to managing their digital assets. Custodial banks, traditionally known for safeguarding tangible assets and facilitating securities trading, have expanded their services to include digital assets. They provide institutional clients with a secure storage mechanism for cryptographic keys that control cryptocurrencies. Digital asset managers are specialized entities that focus exclusively on the management and safekeeping of digital assets, such as cryptocurrencies. Some cryptocurrency exchanges have incorporated custody solutions into their offerings, aimed at providing a one-stop-shop experience for traders and investors. Exchanges offer several benefits, such as the facilitation of quick access to trading and liquidity.
Function: Expansion of brokerage to cater to diverse customer preferences
Asset storage refers to the secure keeping of cryptocurrencies and digital assets. High-grade security practices include cold storage, multi-signature wallets, and encrypted databases to protect against unauthorized access and cyber threats. Users prioritize asset storage according to the volume, value, and type of asset they hold. Institutions with large holdings often prefer cold storage solutions due to their enhanced security features, while retail investors might be more interested in a balance between accessibility and safety. Brokerage services in the crypto space facilitate the buying and selling of digital assets for clients. These services can range from executing trades to providing liquidity and price discovery. Investors prefer brokerage services that offer a competitive fee structure, quick settlement times, and access to a wide variety of cryptocurrencies. High-frequency traders might also seek advanced tools such as algorithmic trading capabilities. Investment agencies offer advisory and asset management services to clients looking to build or maintain a crypto asset portfolio. Services include investment strategies, risk management, and yield-generating opportunities. Security token management entails the handling of security tokens that represent an investment in a real-world asset on the blockchain. Services include compliance adherence, issuance, and investor management.
Use-Cases: Requirement for sophisticated, robust, and scalable crypto-custody solutions for investment
Collateralized loans are financial products where borrowers can access liquidity by using their cryptocurrency holdings as collateral. Crypto custody providers play a crucial role by securely storing the collateral and ensuring its availability for lenders in case of default. As businesses increasingly recognize cryptocurrencies as a valid asset class, some are using them as part of their corporate treasury operations. Crypto custody solutions here are tailored to the specific governance and compliance needs of corporate clients. Crypto staking involves holding funds in a cryptocurrency wallet to support the operations of a blockchain network. Through crypto custody, providers enable staking while maintaining high-security measures. Investment funds that incorporate crypto assets require secure storage solutions to protect their investments. On the retail front, crypto custody services are becoming increasingly common within user-friendly platforms like mobile or web applications. It is targeted at individual investors seeking secure, straightforward ways to manage their cryptocurrency assets, often with value-added services like easy buying, selling, and trading.
The market disruption analysis delves into the core elements associated with market-influencing changes, including breakthrough technological advancements that introduce novel features, integration capabilities, regulatory shifts that could drive or restrain market growth, and the emergence of innovative market players challenging traditional paradigms. This analysis facilitates a competitive advantage by preparing players in the Crypto Custody Provider Market to pre-emptively adapt to these market-influencing changes, enhances risk management by early identification of threats, informs calculated investment decisions, and drives innovation toward areas with the highest demand in the Crypto Custody Provider Market.
The porter's five forces analysis offers a simple and powerful tool for understanding, identifying, and analyzing the position, situation, and power of the businesses in the Crypto Custody Provider Market. This model is helpful for companies to understand the strength of their current competitive position and the position they are considering repositioning into. With a clear understanding of where power lies, businesses can take advantage of a situation of strength, improve weaknesses, and avoid taking wrong steps. The tool identifies whether new products, services, or companies have the potential to be profitable. In addition, it can be very informative when used to understand the balance of power in exceptional use cases.
The value chain of the Crypto Custody Provider Market encompasses all intermediate value addition activities, including raw materials used, product inception, and final delivery, aiding in identifying competitive advantages and improvement areas. Critical path analysis of the <> market identifies task sequences crucial for timely project completion, aiding resource allocation and bottleneck identification. Value chain and critical path analysis methods optimize efficiency, improve quality, enhance competitiveness, and increase profitability. Value chain analysis targets production inefficiencies, and critical path analysis ensures project timeliness. These analyses facilitate businesses in making informed decisions, responding to market demands swiftly, and achieving sustainable growth by optimizing operations and maximizing resource utilization.
The pricing analysis comprehensively evaluates how a product or service is priced within the Crypto Custody Provider Market. This evaluation encompasses various factors that impact the price of a product, including production costs, competition, demand, customer value perception, and changing margins. An essential aspect of this analysis is understanding price elasticity, which measures how sensitive the market for a product is to its price change. It provides insight into competitive pricing strategies, enabling businesses to position their products advantageously in the Crypto Custody Provider Market.
The technology analysis involves evaluating the current and emerging technologies relevant to a specific industry or market. This analysis includes breakthrough trends across the value chain that directly define the future course of long-term profitability and overall advancement in the Crypto Custody Provider Market.
The patent analysis involves evaluating patent filing trends, assessing patent ownership, analyzing the legal status and compliance, and collecting competitive intelligence from patents within the Crypto Custody Provider Market and its parent industry. Analyzing the ownership of patents, assessing their legal status, and interpreting the patents to gather insights into competitors' technology strategies assist businesses in strategizing and optimizing product positioning and investment decisions.
The trade analysis of the Crypto Custody Provider Market explores the complex interplay of import and export activities, emphasizing the critical role played by key trading nations. This analysis identifies geographical discrepancies in trade flows, offering a deep insight into regional disparities to identify geographic areas suitable for market expansion. A detailed analysis of the regulatory landscape focuses on tariffs, taxes, and customs procedures that significantly determine international trade flows. This analysis is crucial for understanding the overarching legal framework that businesses must navigate.
The regulatory framework analysis for the Crypto Custody Provider Market is essential for ensuring legal compliance, managing risks, shaping business strategies, fostering innovation, protecting consumers, accessing markets, maintaining reputation, and managing stakeholder relations. Regulatory frameworks shape business strategies and expansion initiatives, guiding informed decision-making processes. Furthermore, this analysis uncovers avenues for innovation within existing regulations or by advocating for regulatory changes to foster innovation.
The FPNV positioning matrix is essential in evaluating the market positioning of the vendors in the Crypto Custody Provider Market. This matrix offers a comprehensive assessment of vendors, examining critical metrics related to business strategy and product satisfaction. This in-depth assessment empowers users to make well-informed decisions aligned with their requirements. Based on the evaluation, the vendors are then categorized into four distinct quadrants representing varying levels of success, namely Forefront (F), Pathfinder (P), Niche (N), or Vital (V).
The market share analysis is a comprehensive tool that provides an insightful and in-depth assessment of the current state of vendors in the Crypto Custody Provider Market. By meticulously comparing and analyzing vendor contributions, companies are offered a greater understanding of their performance and the challenges they face when competing for market share. These contributions include overall revenue, customer base, and other vital metrics. Additionally, this analysis provides valuable insights into the competitive nature of the sector, including factors such as accumulation, fragmentation dominance, and amalgamation traits observed over the base year period studied. With these illustrative details, vendors can make more informed decisions and devise effective strategies to gain a competitive edge in the market.
Crypto Custody Firm Copper Launches Custodian-agnostic Settlement Network for Institutional Clients
Copper, a crypto custody provider, has unveiled a settlement network designed to cater to the expanding demands of institutional participants in the digital asset space. The platform is custodian-neutral, emphasizing its ability to seamlessly integrate with various custody solutions. This ensures a heightened level of scalability and privacy, aiming to streamline the settlement process for over-the-counter (OTC) trades. [Published On: 2023-12-14]
CoKeeps Gets SC's Nod, Becomes Malaysia's First Qualified DAC
CoKeeps has officially become Malaysia's pioneering digital asset custodian (DAC), having been granted approval by the Securities Commission (SC) to provide custodial services for digital assets. This landmark approval underscores the SC's acknowledgment of the growing integration of digital assets within both individual and institutional portfolios, highlighting the necessity for regulated and secure solutions for asset protection. The endorsement by the SC marks a significant milestone in establishing a trustworthy third-party service for the secure management of digital assets, reinforcing the framework for a more resilient digital asset market. [Published On: 2023-11-10]
German Banking Giant DZ Bank Launches Crypto Custody Platform
Deutsche Bank, a global financial entity, has entered into a pivotal partnership with Taurus, a Swiss-based crypto firm, to inaugurate an advanced crypto custody solution tailored for the institutional market. This new offering aims to address the growing demand for a secure environment for the storage and management of digital assets, including cryptocurrencies and tokenized securities, thereby providing institutional clients with the assurance and reliability synonymous with Deutsche Bank's legacy in financial custodianship. [Published On: 2023-11-08]
The strategic analysis is essential for organizations seeking a solid foothold in the global marketplace. Companies are better positioned to make informed decisions that align with their long-term aspirations by thoroughly evaluating their current standing in the Crypto Custody Provider Market. This critical assessment involves a thorough analysis of the organization’s resources, capabilities, and overall performance to identify its core strengths and areas for improvement.
The report delves into recent significant developments in the Crypto Custody Provider Market, highlighting leading vendors and their innovative profiles. These include Paxos Trust Company, LLC, CoKeeps Sdn Bhd, Riddle & Code GmbH, Coinbase Custody International, Ltd., Circle Internet Financial Limited, Matrixport Technologies Ltd., Gemini Trust Company, LLC, Copper Technologies, The Bank of New York Mellon Corporation, Deutsche Börse AG, Bakkt Holdings, Inc., Orbitos, Anchorage Digital, Tokensoft Inc., BCB Group, Fireblocks Inc., BitGo Inc., Fidelity Digital Asset Services, LLC., Venly NV, Bitcoin Suisse AG, Cobo Services, Ledger SAS, International Business Machines Corporation, New York Digital Investment Group LLC, Custonomy, NodeVenture by TMIA GmbH, and Tangany GmbH.
This research report categorizes the Crypto Custody Provider Market to forecast the revenues and analyze trends in each of the following sub-markets:
- Type
- Self-Custody
- Third-Party Custody
- Custodial Banks
- Digital Asset Managers
- Exchanges
- Function
- Asset Storage
- Brokerage
- Investment Agency
- Security Token Management
- Use-Cases
- Collateralized Loans
- Corporate Treasury
- Crypto Staking
- Investment Funds
- Retail Offering
- Region
- Americas
- Argentina
- Brazil
- Canada
- Mexico
- United States
- California
- Florida
- Illinois
- New York
- Ohio
- Pennsylvania
- Texas
- Asia-Pacific
- Australia
- China
- India
- Indonesia
- Japan
- Malaysia
- Philippines
- Singapore
- South Korea
- Taiwan
- Thailand
- Vietnam
- Europe, Middle East & Africa
- Denmark
- Egypt
- Finland
- France
- Germany
- Israel
- Italy
- Netherlands
- Nigeria
- Norway
- Poland
- Qatar
- Russia
- Saudi Arabia
- South Africa
- Spain
- Sweden
- Switzerland
- Turkey
- United Arab Emirates
- United Kingdom
- Americas
- Market Penetration: This section thoroughly overviews the current market landscape, incorporating detailed data from key industry players.
- Market Development: The report examines potential growth prospects in emerging markets and assesses expansion opportunities in mature segments.
- Market Diversification: This includes detailed information on recent product launches, untapped geographic regions, recent industry developments, and strategic investments.
- Competitive Assessment & Intelligence: An in-depth analysis of the competitive landscape is conducted, covering market share, strategic approaches, product range, certifications, regulatory approvals, patent analysis, technology developments, and advancements in the manufacturing capabilities of leading market players.
- Product Development & Innovation: This section offers insights into upcoming technologies, research and development efforts, and notable advancements in product innovation.
- What is the current market size and projected growth?
- Which products, segments, applications, and regions offer promising investment opportunities?
- What are the prevailing technology trends and regulatory frameworks?
- What is the market share and positioning of the leading vendors?
- What revenue sources and strategic opportunities do vendors in the market consider when deciding to enter or exit?
- Preface
- Research Methodology
- Executive Summary
- Market Overview
- Market Insights
- Crypto Custody Provider Market, by Type
- Crypto Custody Provider Market, by Function
- Crypto Custody Provider Market, by Use-Cases
- Americas Crypto Custody Provider Market
- Asia-Pacific Crypto Custody Provider Market
- Europe, Middle East & Africa Crypto Custody Provider Market
- Competitive Landscape
- Competitive Portfolio
- List of Figures [Total: 22]
- List of Tables [Total: 380]
- List of Companies Mentioned [Total: 27]
In a world where “virtual” everything is rapidly attracting people, cryptocurrencies are no less. Although they are rarely used in the retail sector, cryptocurrencies’ value has made them a popular trading and investment tool. They are also used for cross-border transactions to a limited extent.
Exchanges and wallets that store crypto are vulnerable to hacking. Over the years, numerous cryptocurrency exchanges and wallets have been hacked, often leading to the theft of "coins" worth millions of dollars.
By introducing highly regulated and advanced products, cryptocurrency custody providers such as Venly, BitGo Inc., Cobo Services, and Gemini Trust Company, LLC are evolving to increase security and operational effectiveness in order to encourage the next wave of adoption of digital assets and expand the blockchain ecosystem.
Moving forward, traditional financial institutions are to be working hand-in-hand with cryptocurrency custodians, sub-custodians, and service providers.
In February 2023, Zodia Custody Limited launched a joint venture with SBI Digital Asset Holdings Co., Ltd. to act as a crypto assets custodian, targeting institutional clients in Japan. Through their own ecosystems, the businesses aim to provide a wealth of operational expertise and technical know-how to the crypto asset area, ensuring the proper protection funds.
With Bitcoin, Ethereum, Litecoin, and Ripple gaining momentum and selling like hotcakes, crypto custodians are to be all the rage in the forthcoming years.
The primary objective of crypto custody providers is to offer secure storage for investors' digital assets. These providers use a mixture of hot and cold storage solutions to ensure that assets are kept safe from theft, network breaches, and hacking attempts. They also provide recovery solutions for lost, stolen, or accidentally transferred keys. Furthermore, they offer multi-signature security protocols that permit asset access only when all necessary parties provide their keys' approval. In this way, investors can be sure they are protected against various hazards that could potentially put their assets at risk.
On top of storage security, another significant benefit of employing crypto custody providers is their regulation compliance, ensuring that investors comply with the various reporting, auditing, and anti-money laundering (AML) and know-your-customer (KYC) regulations that apply to digital assets. These are typically critical for institutional investors such as banks, hedge funds, and insurance companies with strict investment vehicle requirements. Custody providers that comply with regulatory responsibilities lessen the burden on investors, allowing them to focus more on the execution of their trading strategies.
Additionally, crypto custody providers offer the convenience of operation that allows investors to manage accounts and assets via user-friendly interfaces, similar to online banking platforms. These interfaces allow investors to manage accounts, view portfolio performances, position of assets, leverage trading positions, and other features from the comfort of their devices. This ease of use promotes better decision-making, allowing investors to respond efficiently to market conditions, news, and events.
Another benefit of employing custodians is the ease of carrying out specific investment strategies, helping to execute timely activities that increase earnings or reduce risks while minimizing tax exposures. The custodian provider takes care of the highly complex elements involved in executing these strategies and can manage decentralized exchanges, staking of crypto assets, and crypto lending, saving users time and ensuring that professionals manage specialized requirements.
The utilization of crypto custody providers' services has become a fundamental component of financial services for digital assets. Whether individual or institutional, investors looking to succeed in cryptocurrency trading must use trust-worthy custody services to help manage and protect their assets effectively.
In summary, investors can leverage security, regulation compliance, operational convenience, and expertise by relying on reliable and reputable crypto custody providers. These benefits offer significant advantages and are indispensable for investors considering their digital asset holdings as long-term investments. It is, therefore, important for investors to choose the right crypto custody provider offering to suit their specific needs while ensuring that their investment risks are mitigated and the assets remain safe.
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