Custody

Secure storage and management of digital assets by qualified third-party institutions, ensuring protection against theft and unauthorized access.

What is Custody?

Custody refers to the secure storage and management of digital assets by qualified third-party institutions, ensuring protection against theft, loss, or unauthorized access while complying with regulatory standards. For Bitcoin ETFs, custody is a critical component, where specialized custodians like Coinbase Custody (serving over 80% of issuers) hold the underlying Bitcoin reserves, enabling investors to gain exposure through regulated exchange-traded products without direct ownership. Custody providers facilitate ETF operations by safeguarding assets for issuers like BlackRock’s IBIT, which holds over $90 billion in Bitcoin as of 2025.

Institutional-grade custody involves segregated wallets, multi-signature protocols, cold storage, and regular audits. As demonstrated in partnerships like U.S. Bank’s 2025 resumption of Bitcoin custody services, where NYDIG serves as sub-custodian, supporting both direct holdings and ETF administration. This infrastructure bridges traditional finance and crypto, managing trillions in assets while mitigating risks.