- 21Shares has tapped Anchorage Digital to hold funds for its Bitcoin and Ethereum spot ETFs.
- Anchorage is the fourth custodian to launch in the $60 billion U.S. crypto spot ETF market.
- Coinbase currently holds 80% of the market, leading to concentration risks.
Cryptocurrency cash exchange-traded funds have a new custodian: Anchorage Digital.
This is also good news for investors.
So far, Bitcoin and Ethereum spot ETFs in the US have primarily used cryptocurrency exchange Coinbase as a custodian — with the exceptions of Fidelity, which self-custodies, and VanEck, which uses Gemini.
Concentration around a single custodian can be risky, Kinga Bosse, COO of crypto infrastructure firm MPCH, told DL News in May.
“In the traditional financial system, the custody market is not completely decentralized, but there are large, long-standing organizations that take care of it,” Bosse said.
The federally licensed crypto bank announced today that it will provide custody services for ARK Invest and 21Shares’ spot Bitcoin ETF, ARKB, as well as 21Shares’ spot Ethereum ETF, CETH.
Having accumulated $3 billion in assets since its launch on January 11, ARKB is the third best-performing Bitcoin ETF of the year, behind BlackRock and Fidelity, and the fourth largest ETF if you include Grayscale’s GBTC.
CETH, meanwhile, has raised $9 million since its launch on July 23, making it the smallest Ethereum fund at the moment.
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A $60 billion industry
A former global head of strategic investments and partnerships at banking giant State Street, Bosse said Coinbase takes on “a lot of responsibility” by retaining 80% of the $60 billion crypto ETF spot market.
“I don’t think even Coinbase disagrees that risk needs to be diversified,” Bosse added.
“This is not a monopoly game. This is not about Google grabbing market share. This is about security, people’s money and responsibility. All of that has to be shared.”
Tom Carreras writes about the markets for DL News. Do you have advice on Bitcoin ETFs and custody solutions? Contact us at tcarreras@dlnews.com
