Top Page | English | 简体中文 | 繁體中文 | 한국어 | 日本語
Sunday, 9 May 2021, 21:41 HKT/SGT
Share:
    

Source: Opimas
Opimas estimates that over US$190 billion worth of Bitcoin is currently at risk due to subpar safekeeping

US, May 9, 2021 - (ACN Newswire) - Safekeeping of cryptocurrencies presents a challenge for institutions holding cryptocurrencies on their clients' behalf. Cryptocurrency transactions are irreversible and anyone with full access to a wallet's private key controls the cryptocurrencies that reside within it. Frighteningly, a number of institutional participants and even some large cryptocurrency exchanges rely on subpar custody approaches, leading Opimas to estimate that over US$190 billion worth of Bitcoin is currently at risk due to subpar safekeeping.

Figure 1: Custody Methods Utilized by Institutional Investors

Figure 2: A Comparison of HSM and MPC Technology Providers

Figure 3: The Market for Crypto Custody & Prime Brokerage Services Is Growing

Figure 4: Institutional Cryptocurrency Holdings Over Time

Luckily, a number of companies have emerged to address this problem. A new research report from Opimas--Crypto Custody: No More Excuses (http://www.opimas.com/research/653/detail/), authored by analysts Suzannah Balluffi and Anne-Laure Foubert--looks at the landscape of cryptocurrency custody-enabling technology providers and institutional-grade cryptocurrency custodians as well as the size of the market for cryptocurrency custody and brokerage services.

Some key findings in the report include:

Many of even the largest holders of Bitcoin and other digital assets continue to rely on storage devices meant for individual investors. Although some of these self-custody devices and wallets are secure and reputable, the operational risk posed by this approach is significant for institutional investors. Furthermore, a chunk of institutionals' cryptocurrency holdings sit in hot wallets on exchanges. In total, about 22% of institutional cryptocurrency holdings are safeguarded in these relatively risky manners (Figure 1).

There are no more excuses for lackadaisical safekeeping - institutions can now choose from several reputable cryptocurrency custody-enabling technology providers and institutional-grade cryptocurrency custodians. Yet no custody solution is equal - there is still no best practice when it comes to security and governance relating to private keys. For example, some providers may rely on time-tested Hardware Security Modules (HSMs), while others use a newer technology known as Multi-Party Computation (MPC) - see Figure 2.

Some cryptocurrency custodians have followed in the footsteps of traditional capital markets by adding prime brokerage services to their offerings, including trading and settlement, lending, margin finance, staking, reporting, and capital introduction services. Opimas estimates that the current annual revenues generated by the institutional crypto brokerage and custody market are roughly US$2 billion and will grow to nearly US$8 billion by 2026 - a sizeable portion of this coming from brokerage services (Figure 3).

Regulations surrounding institutions' ability to store cryptocurrency have become clearer (and in some cases more favorable) in numerous jurisdictions. Notably, the Office of the Comptroller of the Currency (OCC) ruling in the US has allowed banks to store cryptocurrencies for their customers. This regulatory clarity has led a number of financial institutions around the world to provide trading and custody for digital assets. With the advances in brokerage and custody solutions, Opimas expects institutional cryptocurrency holdings to grow from 20% of the cryptocurrency market cap to over 50% by 2026 (Figure 4).

Source: PlatoData Intelligence (bit.ly/3xXPK0r)


Topic: Press release summary
Source: Opimas

Sectors: FinTech & Blockchain
http://www.acnnewswire.com
From the Asia Corporate News Network


Copyright © 2021 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.



Latest Press Releases
Grand Ming Group Holdings Limited Announces Annual Results for the Year Ended 31 March 2021  
June 19, 2021 16:00 HKT/SGT
Oscar De La Hoya, King Of Pay-Per-View To Return To The Ring on Triller  
June 19, 2021 10:00 HKT/SGT
DeFi Powerhouse Fantom's Native Token FTM Gets Listed on BitFinex and Gemini  
June 19, 2021 04:00 HKT/SGT
Leon Fuat Berhad Shareholders Pass Resolution to Acquire Factory for Rm28.0 Million  
June 18, 2021 18:00 HKT/SGT
IMC Ventures Partners with PIER71 to Invest and Nurture the Maritime and Supply Chain Ecosystem in Singapore  
June 18, 2021 17:36 HKT/SGT
Toyota Yaris WRC to face another 'new' challenge on Africa's return  
June 18, 2021 16:08 HKT/SGT
Hitachi to Donate to COVID-19 Relief Efforts in India and Other Countries  
June 18, 2021 15:19 HKT/SGT
Eisai, Bristol Myers Squibb Enter Into Global Strategic Collaboration for Eisai's MORAb-202 Antibody Drug Conjugate  
June 18, 2021 14:02 HKT/SGT
Malaysia Permission Granted for COVID-19 Test Kit from China for Emergency Use; Homegrown Holista Colltech Receives Initial Order for 15,000 Units for Deployment  
June 18, 2021 14:00 HKT/SGT
Mitsubishi Power Ships JAC Gas Turbine to Brazil: Marlim Azul Project Will Be the Most Fuel-efficient Gas Turbine Power Plant in South America  
June 18, 2021 13:07 HKT/SGT
More Press release >>
 Events:
More >>
 News Alerts
Copyright © 2021 ACN Newswire - Asia Corporate News Network
Home | About us | Services | Partners | Events | Login | Contact us | Privacy Policy | Terms of Use | RSS
US: +1 800 291 0906 | Beijing: +86 400 879 3881 | Hong Kong: +852 2217 2912 | Singapore: +65 6304 8926 | Tokyo: +81 3 6859 8575

Connect With us: