Kraken Considers Entering Crypto ETF Custody Market as Spot Ethereum ETF Approval Awaits
Kraken, one of the largest cryptocurrency exchanges in the US, is reportedly exploring the possibility of entering the crypto exchange-traded fund (ETF) custody race. The move comes as anticipation grows for the approval of spot Ethereum ETFs. Kraken aims to follow in the footsteps of Coinbase, which currently serves as a coin custodian for a majority of the proposed Bitcoin ETFs.
As a custodian, Kraken would hold assets on behalf of investors, safeguarding them from potential threats. David Ripley, CEO of Kraken, announced that the exchange is preparing to unveil a new custody product. This development is significant for the exchange, as it underscores the importance of the synergy between custody and liquidity for customers.
The market is eagerly awaiting regulatory approval for spot Ethereum ETFs, and Kraken’s entry into the crypto ETF custodianship market marks a crucial milestone in the democratization of cryptocurrency investments. Custody rates for clients vary, with larger clients enjoying lower rates. Additionally, rates may differ depending on whether customers avail additional services such as trading.
Industry insiders suggest that the cost of custody platforms and trading spreads will play a crucial role in determining the competitiveness of ETFs in terms of pricing. Other major players in the crypto trading and custody space, including Bakkt and BitGo, are also engaging in discussions with Bitcoin ETF managers regarding custody services.
Last year, Kraken announced its plans to establish a new crypto bank in the United States. The bank’s focus includes offerings like USD and crypto deposit accounts, multiple funding and payment options, and institutional custody products—a testament to Kraken’s commitment to expanding its range of financial services.
The entrance of Kraken into the crypto ETF custody market demonstrates the growing interest and opportunities in the cryptocurrency space. Investors and market participants are eagerly awaiting the approval of spot Ethereum ETFs, and Kraken’s upcoming custody product adds another dimension to the evolving crypto landscape.
Analyst comment
Positive news. As Kraken explores entering the crypto ETF custody market, it showcases the growing interest and opportunities in the cryptocurrency space. Kraken’s custody product, along with the anticipation of spot Ethereum ETF approval, will contribute to the democratization of cryptocurrency investments and expand the range of financial services in the market. The competitiveness of ETFs will depend on factors such as custody rates and trading spreads. Other major players are also engaging in discussions regarding custody services.
