With the collapse of the cryptocurrency exchange FTX, the use of regulated custodians has attracted attention, and the revenue opportunity for custodians will increase from less than $300 million (about 38.6 billion yen) by 2033. It could grow to $8 billion, investment firm Bernstein said in a research report released Jan. 17.
“Crypto custody is the foundation for enabling institutional investment,” said Bernstein analysts Gautam Chhugani and Manus Agrawal. Unlike cryptocurrency storage, which is all about protecting private keys, it can be said to be a more technical undertaking.”
Bernstein predicts that custody services will grow rapidly in the medium term due to a rapid increase in the “penetration of crypto asset custody” among existing investors after the FTX bankruptcy, and an increase in the entry of institutional investors into the crypto asset market. ing.
In addition, Bernstein said crypto firms and banks offering Wall Street-like custody, market making, and prime brokerage services to investors entering the crypto market would be a huge revenue opportunity.
Market-making is also expected to increase as more institutional investors enter the market and the resulting demand for liquidity from high-cap coins to less popular tokens increases, the report said. A market maker is a company that provides liquidity to an asset or security.
As institutional investors enter the crypto market, they will also need prime brokerage services such as over-the-counter (OTC) trading desks, derivatives, loans and other structured products. It is said that there is a possibility that it will grow into a revenue opportunity of $ 14 billion (about 1.8 trillion yen) in the future.
｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Original: Bernstein Says Custody Services Are the Foundation for Institutional Crypto Adoption