Anchorage Competes with Coinbase in $60 Billion Bitcoin and Ethereum ETF Custody Battle
Anchorage Digital has been chosen by 21Shares to safeguard the assets for its spot Bitcoin and Ethereum ETFs, marking a significant development in the realm of crypto spot exchange-traded funds. This move diversifies the custodian landscape in the $60 billion US spot crypto ETF market, which had been predominantly dominated by Coinbase, with Fidelity and VanEck being exceptions.
The concentration of custody around one entity poses risks, as highlighted by Kinga Bosse, the chief operating officer at crypto infrastructure firm MPCH. Bosse emphasized the importance of risk diversification in the custody market, drawing parallels to the traditional finance system where large, established organizations typically handle such responsibilities.
Anchorage Digital, a federally chartered crypto bank, has announced its provision of custody services for ARK Invest and 21Shares’ spot Bitcoin ETF (ARKB) and 21Shares’ spot Ethereum ETF (CETH). ARKB, which has amassed $3 billion in assets since its launch on January 11, stands as the third most successful Bitcoin ETF of the year, following BlackRock’s and Fidelity’s offerings. Additionally, it ranks as the fourth largest ETF when considering Grayscale’s GBTC. On the other hand, CETH has gathered $9 million in assets since its introduction on July 23, making it the smallest Ethereum fund currently available.
Bosse further stressed the need for risk-sharing in the custody space, underscoring the critical nature of security, financial assets, and liability. The market dynamics of crypto ETFs and custody solutions are evolving, prompting the industry to explore diversified approaches to mitigate risks effectively.
In conclusion, the involvement of Anchorage Digital as a custodian for prominent crypto ETFs signifies a positive step towards enhancing risk management and market resilience. As the crypto landscape continues to evolve, collaboration and diversification in custody services are essential for ensuring the security and stability of investors’ assets. For further insights on Bitcoin ETFs and custody solutions, readers can contact Tom Carreras, who covers market developments for DL News, at tcarreras@dlnews.com.
