Why Institutions Need Crypto Custody Services
Institutional investors are increasingly incorporating Bitcoin and digital assets into their portfolios, and with this shift comes the imperative need for secure, compliant crypto custody services.
Traditional financial institutions have long relied on regulated custodians to protect client assets, and the same principles now apply to digital assets. Without robust custody solutions, institutions risk exposure to significant security breaches, regulatory non-compliance, and operational inefficiencies.
Why Do Institutions Need Crypto Custody Services?
Institutional-grade crypto custody services provide several benefits:
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Enhanced Security and Protection: Multi-layered security protocols—including segregated accounts, advanced cold storage, and multi-signature authentication—shield assets from cyber threats and operational vulnerabilities.
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Regulatory Compliance and Transparency: By complying with applicable regulatory requirements in relevant jurisdictions, institutional custodians provide the oversight and accountability required to meet legal obligations and protect investors.
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Operational Efficiency: API-powered integration with trading and settlement platforms ensures real-time access and streamlined asset management, enabling institutions to react quickly to market changes.
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Risk Mitigation: Redundant operational controls, such as geographically distributed backup storage and disaster recovery protocols, minimize the risk of single points of failure.
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Insurance Coverage: Insurance policies, where applicable, may safeguard against potential losses due to theft, fraud, or operational mishaps. Coverage details vary by provider and policy.
Institutional crypto custody services are essential for mitigating risks and ensuring that digital asset management meets the high standards demanded by professional investors. They bridge the gap between traditional financial security practices and the evolving digital asset landscape, empowering institutions to safeguard, optimize, and capitalize on their digital asset portfolios.
The Role of Institutional Crypto Custody Services
Crypto has transformed simple lines of code into a global security revolution.
Institutional crypto custody services play a critical role in this landscape, ensuring compliance, security, and trust. Regulatory oversight remains a cornerstone of institutional custody, with custodians working closely with relevant global authorities to maintain transparency and adhere to applicable standards.
Despite growing demand for security, a recent GlobalData survey found that only 10.8% of cryptocurrency holders have insurance. However, 41.9% of non-policyholders would consider purchasing a crypto custody policy if available, with 26.2% open to the idea.
Theft and hacking remain top concerns, with 25.1% of policyholders ranking them as critical risks. However, insurers remain cautious due to regulatory uncertainty, market volatility, and limited historical data.
Recent industry insights underscore the growing reliance on secure custody solutions.
As institutional investors increasingly engage with crypto markets, reliance on secure custody solutions continues to rise. Industry insights from platforms like CoinDesk, CNBC, and major exchanges have highlighted the accelerating adoption of digital assets.
BitGo: Setting the Standard for Security & Trust
At BitGo, our core commitment is to protect client assets and foster trust in the digital asset ecosystem. We operate through multiple regulated Trust companies in the United States and internationally, acting as qualified custodians where applicable, with a fiduciary duty to secure client funds.
Our suite of services includes both non-custodial hot wallets and highly secure custodial cold wallets. These assets are maintained in segregated, bankruptcy-remote accounts and are never re-hypothecated, reinforcing our dedication to transparency and reliability. BitGo maintains applicable licenses and approvals in various jurisdictions and complies with relevant regulations and fiduciary standards.
For more information about BitGo’s crypto custody solutions and digital asset services, connect with us.
About BitGo
BitGo is the leading infrastructure provider of digital asset solutions, delivering custody, wallets, staking, trading, financing, and settlement services from regulated cold storage. Since our founding in 2013, we have focused on enabling our clients to securely navigate the digital asset space. With a large global presence through multiple regulated entities, BitGo serves thousands of institutions, including many of the industry's top brands, exchanges, and platforms, as well as millions of retail investors worldwide. As the operational backbone of the digital economy, BitGo handles a significant portion of Bitcoin network transactions and is the largest independent digital asset custodian, and staking provider, in the world. For more information, visit www.bitgo.com.
©2025 BitGo Inc. (collectively with its affiliates and subsidiaries, “BitGo”). All rights reserved. BitGo Trust Company, Inc., BitGo Inc., and BitGo Prime LLC are separately operated, wholly-owned subsidiaries of BitGo Holdings, Inc., a Delaware corporation headquartered in Palo Alto, CA. No legal, tax, investment, or other advice is provided by any BitGo entity. Please consult your legal/tax/investment professional for questions about your specific circumstances. Digital asset holdings involve a high degree of risk, and can fluctuate greatly on any given day. Accordingly, your digital asset holdings may be subject to large swings in value and may even become worthless. The information provided herein is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation. BitGo is not directing this information to any person in any jurisdiction where the publication or availability of the information is prohibited, by reason of that person’s citizenship, residence or otherwise.