The wider world of crypto tokens is becoming a bit more accessible to institutional investors.
The security startup BitGo exclusively told CoinDesk on Tuesday, July 10, it will expand its suite of custody products and services to support 57 new ethereum assets, a move driven by demand for services that safeguard private keys – the alphanumeric strings that act as passwords for crypto assets – and that, once lost, are gone forever.
As such, the move is a telling one for the blockchain security sector, one that showcases how it's in the midst of a changing competitive landscape.
Founded in 2013, BitGo has become an industry leader managing wallets at crypto exchanges, but to date, its service has been limited to larger protocols like bitcoin and ethereum. (Indeed, the overall lack of options has even led traditional custodians like BNY Mellon, JPMorgan and Northern Trust to consider the business, sources told Bloomberg in June.)
The startup is hardly the only industry upstart rushing to debut institutional custody services – U.S. exchange provider Coinbase, the Swiss startup Smart Valor and Japanese bank Nomura are just three of the companies rolling out licensed crypto storage solutions.
Yet the addition of ethereum tokens could be a key first-move advantage. According to BitGo CTO Benedict Chan, there has been a surge in demand for custody solutions for alternative crypto assets such as the kind it's now adding.
Benedict Chan, CTO of BitGo, told CoinDesk:
"These institutions, they generally don't want to self-manage their coins. They are looking for someone that can support multiple coins."
Timothy Furey, CFA and head of banking at Satis Group, a firm focused on advising institutions on ICO investments, described this blockchain industry trend as an "arms race" to offer institutional-grade custody solutions for a spectrum of assets.
That's why VP of product marketing, Robin Verderosa, said BitGo is now looking to obtain a BitLicense in New York and a qualified custodian license in South Dakota. BitGo aims to offer even more custodial services, adding more than 100 cryptocurrencies by the end of 2018.
Verderosa said courting institutional investors has become BitGo's priority, adding:
"What we've learned is that they're interested in investing in a basket of coins and tokens that kind of help hedge the market and give better returns."
See more:
https://www.coindesk.com/bitgo-adds-57-ethereum-crypto-tokens-custody/
