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One of the biggest problems and concerns that every investor has, and especially those who work with large sums of money, is keeping their funds safe and secure. Due to the fact that even the safest portfolios may be lost or hacked, numerous services have emerged in recent years that offer additional security. These are known as crypto custodiansand even if they are likely to be able to secure their clients' funds, as always, it is important to know which of them is trustworthy and the best in what they do.
Explanation of the encrypted custodians
Before we begin to address the issue of what the best service is, we must first make sure it is clear what users can expect from these services. The first thing to notice is that crypt keepers they are largely focused on larger investors. They tend to do with institutional investors, people with a high net worth and others who want to find a safe way to keep their coins. They act as trusted third parties who can protect the resources of other people and businesses and offer them peace of mind, rather than constantly worry about the security of their funds.
Another great advantage of using custodial services is that customers do not have to possess technical knowledge of the correct ways to store encryption and protect their portfolios and funds. The custodians, on the other hand, are well aware of the most advanced methods to do so, which they apply to prevent hackers or malicious threats from accessing the funds for which they are responsible.
In the end, these service providers began to gain more popularity, and many of them appeared as a result.
What are the best crypto-custody providers?
BitGo
BitGo is considered one of the best, if not the best encryption service provider in the world. The company supports over 100 cryptocurrencies and has been active since 2013. It mainly offers cold storage solutions (maintenance of offline funds), multi-user accounts and advanced controls on custody policies.
Coinbase
Next, there is Coinbase, which is the largest and most popular encryption exchange in the United States, in addition to being a wallet and a custodian. In fact, its custody service is a relatively recent addition, which was launched only last year. Many say that Coinbase believes that institutional investors are about to encrypt, which is why the exchange has started providing this type of service. It is already known in the United States and, if it will start to function as a caretaker, it will probably attract many of the institutions that will soon arrive.
DACC (Digital Asset Custody Company)
DACC is a new custodian, launched in 2018. Just like Coinbase Custody, it is designed to attract and serve institutional investors. It offers excellent security solutions and guarantees the security of its customers' digital resources. In addition, it offers archiving solutions that include continuous customer support, periodic reports on the status of customer resources, insurance and more.
Gemini
Gemini is yet another well-known cryptocurrency exchange that was launched by the Winklevoss twins. It is a fully regulated exchange, based in the United States, which has also decided to start acting as custodian to meet the demands of its customers. In fact, its custody service is known for its low cost and currently supports five coins (BTC, LTC, ETH, BCH, ZEC).
ITbit
itBit is an older exchange, originally launched in 2012. It is based in New York and also acts as a regulated custodian. Its customers are located all over the world and its services include regular reports on the status of customer resources, advanced asset protection, as well as holding capital reserves against customer deposits. At present, this service also supports only five digital currencies, although it is possible that this number will change to include additional currencies in due course.
Kingdom Trust
This is another institutional custodian who already has a lot of experience working with hedge funds, banks, RIAs, family offices and others who are interested in investing in crypts. It offers a number of benefits and security features, the most important being insurance for deposited assets, which has made many quite confident in the services' ability to protect funds.
Xapo
Finally, there is Xapo, which is known as one of the oldest Bitcoin wallets on the market. He also acts as custodian and presumably holds up to 7% of all Bitcoins circulating in his own deposit in Switzerland. This is a company based in Zug and offers numerous security features. Xapo is also very well funded and many consider it one of the best BTC companies in the world.
Does the encrypted case have a future?
According to recent reports, institutional investors and even Wall Street, in general, are becoming increasingly open to cryptocurrencies. Projects such as the Bakkt exchange are one of the main reasons for this, as they are designed specifically to attract institutions to cryptography, while Bitcoin ETFs, if approved, will reduce the security risks associated with the ownership of coins. Once the institutions start to get involved with digital currencies, it's a small step from ETFs to ownership of the crypto.
When this happens, many of them should turn to the caretakers, which means that this type of service can certainly have a bright future ahead of it. In the meantime, some institutional investors are already deeply involved with the cryptographic space, which indicates that many custodians already have more than a few customers. In 2019, however, the majority could decide to follow this trend, which will have positive consequences for the entire crypto industry.
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