Bitcoin ETF price war is trickling down to crypto custodians

The competition among Bitcoin ETF providers has led to a price war, which is now affecting crypto custodians. As a result, custodians are vying for business by offering their services to multiple ETF managers. For instance, Valkyrie Investments has retained BitGo as a second custodian to safeguard customer assets, and Coinbase currently dominates the custody role for Bitcoin ETFs, supporting eight out of the 10 issuers. This competition is driving custodians to offer more competitive pricing and seek ways to mitigate risk by having multiple options for safeguarding assets. The price war is also influencing the cost of custody platforms and the spread in trading, making the market more competitive.

Bitcoin ETFs have been one of the most popular investment vehicles for main street investors seeking exposure to the cryptocurrency market. However, with the recent price war between Bitcoin ETFs, the competition has trickled down to crypto custodians. The question remains: how will this impact the future of cryptocurrency storage and management?

Firstly, let's take a step back and understand the context of the current situation. In recent months, we have seen an explosion of Bitcoin ETFs entering the market, each vying for market share and trying to outdo one another in terms of fees, liquidity, and ease of trading. This has led to a price war, with ETF providers constantly dropping their fees and offering more attractive terms to investors.

However, this price war has had an unintended consequence: it has trickled down to crypto custodians. With so many investors pouring into the cryptocurrency market through ETFs, demand for safe and secure storage of their assets has skyrocketed. This has led to a surge in the number of crypto custodians entering.