As more institutional players start to enter the crypto markets, firms are increasingly looking for high-quality custodial solutions. BitGo is one of the most popular custodial solutions for crypto exchanges around the globe, and it’s eyeing up the institutional investor market with the addition of support for stablecoins.
This week the crypto custodian added support for a number of USD stablecoins, including Circle’s Centre USD (USDC), the Gemini Dollar (GUSD), TrueUSD (TUSD), Paxos Standard Token (PAX), and Maker’s Dai (DAI). This new addition of stablecoins couldn’t have come at a better time for investors, given that the crypto market is in the midst of a freefall.
No Sign of Tether
In the announcement, there was no sign of the one popular stablecoin – Tether (USDT). Tether has recently come under fire from all sides over claims that it’s not a true stablecoin, and that it’s being used to manipulate the price of Bitcoin on Bitfinex. Earlier this year Tether burnt more than 500 million USDT tokens – just over half of the total circulating supply – in a move that shocked the crypto world. The fact that Tether is starting to feel the pressure and looks set to crumble could be the reason behind BitGo’s decision not to add support for the stablecoin at this time.
Adding More Compatible Cryptos for Storage
As firms like Fidelity and TD Ameritrade begin to open up crypto trading to their clients, these firms are looking out for custodial solutions that can safely store a number of different cryptos. BitGo has highlighted that it’s keen to increase the number of cryptos is has storage support for in a bid to win over these new crypto trading platforms. Fidelity current has more than $7.2 trillion worth of assets under management, and by placing just 1% of these assets into the crypto markets would be huge business for BitGo or any other custodial solution for that matter.
Cold Wallets Come Under Fire
Crypto exchanges and trading platforms are coming under an increased amount of scrutiny and pressure following the hack of Trade.io’s cold storage system. Hackers managed to bypass a system that gave them access to funds held in a bank’s safety deposit box. How the hackers pulled off such a feat is still yet to be discovered, but the hack has increased the demand for secure third-party custodial solutions like BitGo. This means exchanges like Trade.io can focus on doing what they do best, while leaving storage of cryptos to the professionals.
BitGo is pushing to become the biggest and most popular custodial solution. While Coinbase and Gemini are both vying to get a foothold in this space, both exchanges are lagging a long way behind BitGo.