On Tuesday, July 10, the security startup BitGo said in an interview that it will expand its suite of custody products and services to support 57 new Ethereum (ETH) resources, a move which is driven by interest for services that protect private keys – the alphanumeric strings that act as passwords for crypto resources and that, once lost, are gone until the end of time.
The more extensive universe of crypto tokens is becoming more available to institutional financial investors. As such, the move is telling everyone how it’s in the midst of a changing competitive scene.
Established in 2013, BitGo has turned into an industry pioneer overseeing wallets at crypto trades, yet to date its services have been restricted to bigger protocols like Bitcoin (BTC) and Ethereum (ETH). In fact, the general absence of alternatives has even driven conventional custodians like JP Morgan, BNY Mellon, and Northern Trust to think about the business sources.
The startup is not the only one in the industry to debut institutional custody services. Swiss startup Smart Valor, Japanese bank Nomura and U.S. exchange provider Coinbase are just three of the companies giving out licensed crypto storage solutions.
The addition of Ethereum (ETH) could serve as a key first-move advantage. As per the CTO of BitGo, Benedict Chan, there has been an increase in the demand for custody solutions for other crypto assets such as the kind it’s now adding.
The CTO of BitGo, Benedict Chan said:
These institutions, they generally don’t want to self-manage their coins. They are looking for someone that can support multiple coins.
Timothy Furey, CFA and head of banking at Satis Group, a firm focused on advising institutions on ICO investments, praised the developments, describing the trend as an arms race to offer institutional-grade custody solutions for a spectrum of assets.
BitGo is also taking bold steps to ensure the quality of its services is high given the risks inherent in dealing with smaller cryptocurrencies. To ensure the quality, Isaac Eleftheriadis heads an 11-person BitGo team focused on rising cryptocurrencies and tokens.
According to Eleftheriadis, every token added in this first batch was explicitly requested by BitGo’s institutional clients. Once there’s an obvious demand for custody options, the team researches this token to make sure its issuers and founding team are reputable.
After the addition of basic storage features, Eleftheriadis’ team has to continually conduct ongoing vigilance to support the crypto tokens. Eleftheriadis said that his team actively monitors whether token issuers are planning code changes, in addition to quarterly security evaluations.
What do you think of this addition by BitGo? Is the startup poised to dominate the market? Let us know in the comments section.