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Author: Admin | 2025-04-27
Jostle, says Seoyoung Kim, professor of finance at Santa Clara University's Leavey School of Business, to attract the most investment. The “usual suspects,” she says, with the broadest reach and strongest reputation—the likes of BlackRock—are in prime position. Relationships with these companies could be highly valuable for the intermediaries.The additional revenue stream could be particularly important for the US-based crypto firms tasked with storing bitcoin for the ETF issuers, who have found themselves in conflict with regulators over their consumer-facing services in the last year. In June, the SEC sued Coinbase, which it accused of operating an unregistered securities exchange in the US. In October, the New York attorney general charged Gemini with participating in a $1.1 billion fraud in relation to a service whereby customers earned interest on crypto deposits. Both companies have denied the charges and will fight them in court. An expansion of their respective custody businesses though could help to offset the prevailing uncertainty over the future of consumer crypto trading in the US, amid the regulatory crackdown.It would even be possible, says Kim, for the crypto firms now acting only as custodians to move into other areas of the ETF plumbing—as APs, for instance. Coinbase does not rule out the possibility, says Greg Tusar, head of institutional product, but will lean into crypto-specific services. Gemini will evaluate the services it provides as spot bitcoin ETFs mature, according to chief strategy officer Marshall Beard.As traditional financial institutions grow comfortable with bitcoin’s technical complexities, there is potential they might “cannibalize portions of the market,” including crypto custody, says Austin Reid, head of business at crypto prime brokerage FalconX. In the interim, there are “opportunities for growth,” he says, for companies ready with the necessary crypto expertise to serve ETF issuers.That opportunity would be multiplied if the new
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