Safety in numbers: How crypto custodians are bringing digital assets into the mainstream

Cryptocurrency

The “new gold” is how the young asset class of cryptocurrencies is often described.  With miners virtually unearthing new ‘coins’ every day via a decentralised system that operates beyond the influence of government, it’s easy to see the attraction. 

Since the start of 2020, Bitcoin has appreciated over 35 per cent, while “old” gold rose 11 per cent, and the S&P 500 index of US stocks was flat.

But the majority of institutional investors are only just starting to dip a toe into crypto waters. Just over a third of institutional investors say they are currently invested in digital assets, according to a recent survey by Fidelity Digital Assets. With six out of ten saying they believe digital assets have a place in their portfolio, crypto may be about to hit the mainstream.

“One of the biggest blocks to investment is liquidity, and the other is the legal answer. It was very unclear until two years ago if you were a regulated fund whether you were allowed to touch this stuff.” This is how Alex Batlin, CEO and founder of digital assets custodian Trustology, who previously worked at UBS and BNY Mellon, explains the lack of investment so far.

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