Kraken Considers Entering the Crypto ETF Custody Market
Crypto exchange Kraken is reportedly planning to join the crypto ETF custody race, following in the footsteps of Coinbase. Currently, Coinbase dominates the custody service for nine out of twelve proposed Bitcoin ETFs in the US. These custodians are responsible for safeguarding the assets held by ETFs, protecting them from hackers and other malicious actors.
Inspired by Coinbase’s success, Kraken aims to secure custody of highly anticipated spot Ethereum ETFs. Kraken CEO David Ripley previously announced plans to launch a new custody product this quarter, which he believes will be a significant milestone for the exchange.
Kraken’s Entry into the Crypto ETF Custodianship Market
As the market awaits regulatory approval for spot Ethereum ETFs, Kraken’s decision to enter the crypto ETF custodian competition marks a significant development in democratizing cryptocurrency investments. The custody rates offered by these custodians vary depending on the size of the client and whether they utilize additional services like trading.
Gavin Michael, CEO of Bakkt Holdings, highlighted that the cost of custody platforms and trading spreads are key factors in determining ETF prices. Other players in the market, such as Bakkt and BitGo, are also engaging with Bitcoin ETF managers and issuers respectively.
Last year, Kraken announced its plans to establish Kraken Bank, offering various services such as deposit accounts in USD and crypto assets, multiple funding options, institutional custody products, and more.
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