Simply stated, bitcoin custody services are third-party services that safely store your cryptocurrency. (Think of them like a “bitcoin bank.”) They generally cater to people holding a large amount of crypto: institutional investors, hedge funds, and high net worth individuals. (Everyone else can use services like Coinbase, which custody crypto for the rest of us.)
In this guide, our editors reveal their picks for the top crypto custodial services, rated and reviewed for 2022.
Crypto custodial providers enable larger investors, such as high-net-worth individuals and institutional investors, to securely store digital assets with a trusted third party.
Considering the technical aspects of private key safekeeping, larger investors prefer to leave the security of their digital assets to custodial services, to better ensure that their funds can’t be accessed by hackers or other malicious actors.
By using a custodian, investors are able to avoid the technical side of storing crypto, while resting assured their digital assets are safe. Due to increasing demand from institutional investors, more bitcoin/crypto custodian service providers have emerged over the past few years.
Before we begin, know that a “hot wallet” is stored online, which makes it easier to access but more vulnerable to hackers, while a “cold wallet” is stored offline, typically in a safe or secured wallet. Most custodians use a combination of both hot and cold wallets.
In this section of our guide, we have rated and reviewed the best crypto custodians to help you choose which service provider may be the right solution for you and your investment needs.
|Custodian||Founded in||Numbers of Assets||Fees||Our Score|
|Coinbase Custody||2012||100+||$0 – 10,000 set up fee and 0.5% p.a.|
|Gemini Custody||2014||40+||0.4% p.a. and a $125 withdrawal fee|
Since its founding in 2013, BitGo has been a global leader in digital asset storage. BitGo manages more than 100 digital currencies and tokens as a certified custodian through custody policy regulations that are institutional-grade. In addition, the firm has cold storage systems and configurable multi-user accounts. BitGo is probably the gold standard in cryptocurrency custody, being officially controlled by South Dakota’s banking division. The platform, mainly a cold-wallet custody provider, provides tested, reviewed, and isolated accounts for maximum protection. Third-party auditors audit the firm regularly to guarantee that the platform remains top-notch in levels of security and functionality.
Located in San Francisco, Coinbase debuted its custody service in 2012, capitalizing on its strength as the leading bitcoin exchange in the U.S. Coinbase uses its access to military-grade cold wallets to offer the highest level of protection for digital money. Coinbase, as a leading bitcoin custody provider in the market, subjects its technology to frequent, standardized auditing operations. Additionally, Coinbase users have the opportunity to stake funds straight from their offline wallets to earn yield (like earning interest on a money market or savings account). Coinbase Custody, in collaboration with a registered broker-dealer, allows investors to secure their digital assets properly.
Gemini is an established digital asset exchange located in New York that offers professional clients a custodial crypto service. Originally known as Vo1t, the project was renamed Genesis Custody after being taken over by the Genesis Group to expand its digital asset servicing operations. Genesis Custody is one of the leading cold wallet crypto custodian service providers. The program employs many military-grade levels of encryption while protecting the private keys of clients in a geographically dispersed manner. In doing so, they make use of several deactivated nuclear bunkers for high-level private protection. Genesis is also a successful digital currency prime brokerage and a global pioneer in institutional digital asset markets. Genesis handles billions of dollars in digital currency swaps, borrowings, and exchanges regularly. It provides a low-cost custody solution for bitcoin, Ether, Litecoin, Zcash, Bitcoin Cash, and storage in a fully regulated setting.
Kingdom Trust is among the leading independent, certified custodians of alternative assets. It provides innovative custodial options and escrow solutions to individual and institutional investors. The company offers global services for Solo 401(k) holders and Self-Directed IRAs, single-member LLCs, investment advisers, broker-dealers, family offices, sponsors, consultancy companies, private equity funds, and other investment platforms. Kingdom Trust has a longstanding reputation as a reliable financial custodian, handling anything from precious metals to pension money. Currently, the platform’s reach has expanded, bringing professional custodial services under its many operations.
Kingdom Trust uses its expertise as an institutional custodian to supply digital custodial services to hedge funds, banks, family offices, and RIAs that intend to participate in digital assets but do not want to store them personally. Furthermore, Kingdom Trust insures all the assets it holds to provide further protection to its clientele.
Digivault, a bitcoin custody service concentrating on institutional enterprises, operates with a deep understanding of cryptocurrency’s mainstream adoption challenges. Digivault offers two solutions: a cold wallet storage solution called Kelvin, and a hot wallet solution called Helios. (Get it?)
The company also places a premium on compliance, being the first standalone digital asset custodian to be registered by the Financial Conduct Authority as a crypto asset firm. The firm currently supports around a dozen crypto assets, and is working on supporting ERC-20 tokens as well.
BitCo, Coinbase, and Gemini have the most established reputations in the crypto custody market, and rate at the top of our rankings. But expect many more “bitcoin banks” to emerge in the coming years.
Wall Street’s newfound openness toward digital currencies as an investment asset class will likely result in more and more bitcoin custodian solutions emerging.
Fund managers will continue to become more open to investing in bitcoin if they can store their investments with regulated custodians in the same way they can for stocks and bonds. Hence, the more this market segment grows, the more institutional investment you should expect for bitcoin and other digital currencies.
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