Coinbase monopolizes custody of major Bitcoin ETFs, is there a possibility that competitors will enter? | CoinDesk JAPAN

• Custody services are an important part of Bitcoin ETF applications, and Coinbase has been selected by nine of the 12 potential issuers.
• BitGo, a major crypto asset custody company, was not selected. However, BitGo CEO Mike Belshe said the company is in talks with ETF issuers.

So far, there has not been much competition to provide custody services, which are a critical infrastructure for Bitcoin ETFs (exchange traded funds). Coinbase, a major U.S. crypto asset trading company, is dominant, and most of the companies that wish to list ETFs include BlackRock, the world’s largest asset management company, Franklin Templeton, and WisdomTree Investments. All companies are requesting custody.

It’s worth noting that BitGo, a major player in the custody industry, was unable to enter.

There is still room for BitGo to enter the market.

Of the companies hoping to launch a Bitin ETF in the U.S., only Hashdex has yet to choose a custodian partner. In an interview with CoinDesk, BitGo CEO Mike Belshe acknowledged that the company is working with “many” of the companies that have applied for a Bitcoin ETF. Although it is small at the moment, there is still room for entry.

“I think Coinbase is the obvious solution on the custodian side, and it’s no wonder it’s become the most popular,” said James Seyffart, ETF analyst at Bloomberg Intelligence. “However, there are several others,” he said. He commented that he would not be surprised if BitGo was eventually selected for any company’s Bitcoin ETF application.

Cryptocurrency exchange Gemini was recently selected by US asset management giant VanEck to apply for a Bitcoin ETF, making it the company’s first custody partner other than Coinbase.

Custody has become a key component of efforts to bring Bitcoin spot ETFs to the U.S. market. Custodians hold assets on behalf of users. In this case, the Bitcoin ETF is responsible for keeping the Bitcoins it owns (expected to be worth billions of dollars) safe and keeping hackers and other bad actors out.

Concerned about focusing on Coinbase

Coinbase, run by CEO Brian Armstrong, is currently the custodian for nine of the 12 Bitcoin ETFs filed in the U.S., but there are concerns about this concentration. is also appearing. There is only one Bitcoin ETF application without a custodian, as Fidelity decided to in-house custody and VanEck chose Gemini.

“Having so much Bitcoin concentrated in one custodian is never ideal,” said Brian D. Evans, founder and CEO of BDE Ventures. I think it would be beneficial for high-priced exchanges to come in as custodians of ETFs.” On the other hand, he pointed out that in the United States, lack of clear regulations makes it difficult to find other candidates, leading to a lack of suitable corporate candidates.

Seifert said, “I think it’s worth noting that the majority of products are choosing Coinbase, and I understand why there is concern, but as long as Coinbase’s security is strong, I don’t think it’s a problem.” “We’ll probably have to see how things develop over the next few months and years.”

｜Translation and editing: Rinan Hayashi
｜Image: Coinbase CEO Brian Armstrong and BitGo CEO Mike Belshe (CoinDesk)
｜Original text: Coinbase Is Dominating a Key Bitcoin ETF Service. Can Anyone Else Join the Race?