The crypto custody arena is expanding day by day. The collapse and bankruptcies of several companies last year instigated existing players to fill in the boots of crypto middlemen. Several firms from the traditional finance space, including the Deutsche Bank, BNY Melon, Fidelity, BNP Paribas, Standard Chartered’s Zodia, Nasdaq, and Ripple, have made notable strides on this front over the past few months.
Well, Anchorage Digital is another such firm. Assets under custody on this platform registered a swift 80% incline during the first quarter of 2023. Diogo Monica, the Co-Founder and President of the San Francisco-based firm recently asserted in an interview,
“We’re talking about billions of dollars of deposits flowing into Anchorage.”
The firm’s core business is to provide custodial services to institutions. Alongside, its umbrella also covered a few bases related to trading, lending, and DeFi.
The ‘institutionalization’ game
Anchorage is notably the first federally chartered crypto bank in the U.S. It has been green-flagged by the Office of the Comptroller of the Currency to act as a custodian for other institutions that want to offer crypto assets. That, in turn, helped pave the path for the firm to gain from the flight to safety that took place after the collapse of crypto firms like FTX last year, Monica explained.
Anchorage Digital is valued at over $3 billion. It has previously been funded by prominent names including Andreessen Horowitz, GIC—Singapore’s sovereign wealth fund, Goldman Sachs, KKR, and Visa. Currently, however, it is not raising any funds.
EDX Markets, a recently launched crypto exchange backed by Citadel, Fidelity, and Charles Schwab, is now reportedly in talks with Anchorage Digital regarding a potential custody partnership. Of late, several companies, including the world’s largest asset manager BlackRock, intend to offer customers a spot in Bitcoin ETF. Commenting on the current state of affairs, Monica said,
“We’re seeing a major shift from retail domination to institutional accumulation. Even though the pie is smaller, the institutionalization of the pie is getting larger.”