Report: Crypto Custodians Are Evolving to Provide More Services

A report issued by Ccdata, a digital asset-focused research firm, highlights the evolving nature of crypto custodians and their efforts to introduce new services for institutional customers. These services include staking, custody of tokenized real-world assets (RWA), and investment product-related opportunities.

Report: Crypto Custodians Are Changing

A report published by Ccdata, a cryptocurrency market research firm commissioned by Zodia Custody, sheds light on the changing landscape of custodians in the digital asset industry. Owned by Standard Chartered, Northern Trust, and SBI, Zodia Custody provides institutional-grade custody solutions. The report indicates that custodians are expanding their offerings to cater to the evolving needs of their clients.

While there are approximately 1.5 billion unique Bitcoin and Ethereum wallets, there are currently only about 100 custodians serving institutional and retail customers. This indicates a significant gap in the market and highlights the potential for increased adoption and usage of crypto assets.

The report emphasizes the need for custodians to adapt quickly to innovative changes within the industry to attract institutional investors. It explores various use cases through which custodians are evolving to serve a wider range of institutions, enabling them to maximize the potential of their digital assets.

New Services

One of the new services being considered by custodians is staking. This involves institutional customers utilizing their crypto assets to validate transactions on proof-of-stake networks such as Ethereum or Solana. Ccdata predicts that this will become a $20 billion market dominated by institutional capital in the future. Custodians will play a crucial role in assisting non-native investors to capitalize on these opportunities.

Another emerging use case is the tokenization of real-world assets (RWA). This industry has witnessed significant growth, expanding tenfold since the beginning of the year. A Citi report projects that it will reach $4 trillion by 2030. Custodians are partnering with startups to offer institutions services focused on tokenized RWA. These services involve the issuance, management, and transparent distribution of these assets on behalf of their owners.

Custodians are also supporting the operation of institutional-oriented products, including trusts and exchange-traded products (ETPs). These products have maintained over $35 billion in assets as of August. The report highlights the potential impact of a spot Bitcoin exchange-traded fund (ETF) launch in the U.S., stating that it is likely to reshape the sector and create new opportunities for investment products.

Frequently Asked Questions

Is it a good retirement strategy to buy gold?

Although it may not look appealing at first, buying gold for investment is worth considering when you consider the global average gold consumption per year.

Physical bullion bars are the most popular way to invest in gold. But there are many other options for investing in gold. The best thing to do is research all options thoroughly and then make an informed decision based on what you want from your investments.

If you don’t need a safe place for your wealth, then buying shares of mining companies or companies that extract it might be a better alternative. Owning gold stocks should work well if you need cash flow from your investment.

ETFs allow you to invest in exchange-traded funds. These funds give you exposure, but not actual gold, by investing in gold-related securities. These ETFs typically include stocks from gold miners, precious metallics refiners, commodity trading companies, and other commodities.

Can the government seize your gold?

Your gold is yours and the government cannot take it. You worked hard to earn it. It belongs entirely to you. But, this rule is not universal. If you are convicted of fraud against the federal government, your gold can be forfeit. If you owe taxes, your precious metals could be taken away. However, even if you don’t pay your taxes, your gold can be kept as property of the United States Government.

What proportion of your portfolio should you have in precious metals

Before we can answer this question, it is important to understand what precious metals actually are. Precious Metals are elements that have a very high relative value to other commodities. They are therefore very attractive for investment and trading. Gold is by far the most common precious metal traded today.

There are many other precious metals, such as silver and platinum. The price volatility of gold can be unpredictable, but it is generally stable during periods of economic turmoil. It is also unaffected significantly by inflation and Deflation.

In general, prices for precious metals tend increase with the overall marketplace. But they don’t always move in tandem with one another. If the economy is struggling, the gold price tends to rise, while the prices for other precious metals tends to fall. This is because investors expect lower rates of interest, which makes bonds less attractive investments.

The opposite effect happens when the economy is strong. Investors favor safe assets like Treasury Bonds, and less precious metals. They are more rare, so they become more expensive and less valuable.

You must therefore diversify your investments in precious metals to reap the maximum profits. It is also a good idea to diversify your investments in precious metals, as prices tend to fluctuate.

Statistics

  • Gold is considered a collectible, and profits from a sale are taxed at a maximum rate of 28 percent. (aarp.org)
  • Indeed, several financial advisers interviewed for this article suggest you invest 5 to 15 percent of your portfolio in gold, just in case. (aarp.org)
  • Instead, the economy improved, stocks rebounded, and gold plunged, losing 28 percent of its value in 2013. (aarp.org)
  • If you accidentally make an improper transaction, the IRS will disallow it and count it as a withdrawal, so you would owe income tax on the item’s value and, if you are younger than 59 ½, an additional 10% early withdrawal penalty. (forbes.com)
  • Contribution limits$6,000 (49 and under) $7,000 (50 and up)$6,000 (49 and under) $7,000 (50 and up)$58,000 or 25% of your annual compensation (whichever is smaller) (lendedu.com)

External Links

irs.gov

bbb.org

finance.yahoo.com

law.cornell.edu

How To

Guidelines for Gold Roth IRA

You should start investing early to ensure you have enough money for retirement. As soon as you become eligible, which is usually around age 50, start saving and keep it up throughout your career. You must contribute enough each year to ensure that you have adequate growth.

You may also wish to take advantage of tax-free investments such as a SIMPLE IRA, SEP IRA, and traditional 401(k). These savings vehicles let you make contributions and not pay taxes until the earnings are withdrawn. This makes them a great choice for people who don’t have access employer matching funds.

Savings should be done consistently and regularly over time. If you don’t contribute the maximum amount, you will miss any tax benefits.

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By: Sergio Goschenko
Title: Report: Crypto Custodians Are Evolving to Provide More Services
Sourced From: news.bitcoin.com/report-crypto-custodians-are-evolving-to-provide-more-services/
Published Date: Fri, 27 Oct 2023 08:00:06 +0000

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