Crypto custody market hits $448 billion, with major banks joining in 2023.
A recent study by Bitget has shown a 250% increase in assets under custodial management, signaling a growing opportunity in the cryptocurrency sector. Custodial accounts, essential for secure digital asset storage, have seen significant growth, particularly in the wake of the Bitcoin ETF’s final approval.
The study also found that the number of custodial accounts has nearly doubled since November 2023. Moreover, short-term custodial accounts, which typically hold funds for less than three months, make up about 77% of the total, with 43% of these account holders redepositing funds.
The study analyzed data from Bitget’s custodial accounts, established in August 2023 in partnership with custody providers like Copper and Cobo. The research aimed to understand the impact of market trends on the use duration of these custodial accounts, which are crucial for gauging investor behavior and the crypto ecosystem’s evolution.
The crypto custody market, valued at $448 billion in 2022, has attracted significant interest from a wide range of investors, including major banks like Commerzbank AG and HSBC, which launched digital asset custody services in 2023. This surge is attributed to the influx of traditional market users into crypto and the overall positive market sentiment, especially surrounding Bitcoin and Ether ETFs.
The continued growth in custodial accounts shown by the crypto market, despite its inherent volatility, is driven by various factors, including the anticipation of digital asset value growth, the integration of crypto payments into daily life, and global economic uncertainties.