Short-term custodial crypto accounts soar 250% with Bitcoin ETF hype

Short-term custodial crypto accounts soar 250% with Bitcoin ETF hype

Feb. 9, 2024

By Oluwapelumi Adejumo

The total assets under custodial accounts increased by 250% during the past four months amid the hype surrounding the spot Bitcoin exchange-traded fund (ETF), according to a Bitget report shared with CryptoSlate.

What spurred the growth?

Bitget attributed the surge to the broader crypto market performance and the escalating anticipation of a bull run among its users. In addition, the firm identified the integration of cryptocurrencies into daily life activities as another pivotal factor that propelled the sector’s growth.

Also, macroeconomic conditions, including regional conflicts and rising geopolitical tensions, are prompting individuals to hedge their crypto savings. Moreover, institutional interest in crypto, particularly Bitcoin and Ethereum ETFs, has spiked, fueling demand for custodial solutions.

The crypto custody market attracted significant interest following the FTX shock collapse of November 2022. More recently, developments like the launch of various Bitcoin ETF products and Binance’s regulatory challenges in the US further stimulated the sector. As a result, several traditional financial institutions like Commerzbank AG and HSBC have ventured into the industry.