Why Institutions Need Crypto Custody Services

Institutional investors are increasingly incorporating Bitcoin and digital assets into their portfolios, and with this shift comes the imperative need for secure, compliant crypto custody services.

Traditional financial institutions have long relied on regulated custodians to protect client assets, and the same principles now apply to digital assets. Without robust custody solutions, institutions risk exposure to significant security breaches, regulatory non-compliance, and operational inefficiencies.

Why Do Institutions Need Crypto Custody Services?

Institutional-grade crypto custody services provide several benefits:

  • Enhanced Security and Protection: Multi-layered security protocols—including segregated accounts, advanced cold storage, and multi-signature authentication—shield assets from cyber threats and operational vulnerabilities.

  • Regulatory Compliance and Transparency: By complying with applicable regulatory requirements in relevant jurisdictions, institutional custodians provide the oversight and accountability required to meet legal obligations and protect investors.

  • Operational Efficiency: API-powered integration with trading and settlement platforms ensures real-time access and streamlined asset management, enabling institutions to react quickly to market changes.

  • Risk Mitigation: Redundant operational controls, such as geographically distributed backup storage and disaster recovery protocols, minimize the risk of single points of failure.

  • Insurance Coverage: Insurance policies, where applicable, may safeguard against potential losses due to theft, fraud, or operational mishaps. Coverage details vary by provider and policy.

Institutional crypto custody services are essential for mitigating risks and ensuring that digital asset management meets the high standards demanded by professional investors. They bridge the gap between traditional financial security practices and the evolving digital asset landscape, empowering institutions to safeguard, optimize, and capitalize on their digital asset portfolios.

The Role of Institutional Crypto Custody Services

Crypto has transformed simple lines of code into a global security revolution.

Institutional crypto custody services play a critical role in this landscape, ensuring compliance, security, and trust. Regulatory oversight remains a cornerstone of institutional custody, with custodians working closely with relevant global authorities to maintain transparency and adhere to applicable standards.

Despite growing demand for security, a recent GlobalData survey found that only 10.8% of cryptocurrency holders have insurance. However, 41.9% of non-policyholders would consider purchasing a crypto custody policy if available, with 26.2% open to the idea.

Theft and hacking remain top concerns, with 25.1% of policyholders ranking them as critical risks. However, insurers remain cautious due to regulatory uncertainty, market volatility, and limited historical data.

Recent industry insights underscore the growing reliance on secure custody solutions.

As institutional investors increasingly engage with crypto markets, reliance on secure custody solutions continues to rise. Industry insights from platforms like CoinDesk, CNBC, and major exchanges have highlighted the accelerating adoption of digital assets.

BitGo: Setting the Standard for Security & Trust

At BitGo, our core commitment is to protect client assets and foster trust in the digital asset ecosystem. We operate through multiple regulated Trust companies in the United States and internationally, acting as qualified custodians where applicable, with a fiduciary duty to secure client funds.

Our suite of services includes both non-custodial hot wallets and highly secure custodial cold wallets. These assets are maintained in segregated, bankruptcy-remote accounts and are never re-hypothecated, reinforcing our dedication to transparency and reliability. BitGo maintains applicable licenses and approvals in various jurisdictions and complies with relevant regulations and fiduciary standards.

For more information about BitGo’s crypto custody solutions and digital asset services, connect with us. 

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About BitGo

BitGo is the digital asset infrastructure company, delivering custody, wallets, staking, trading, financing, and settlement services from regulated cold storage. Since our founding in 2013, we have been focused on accelerating the transition of the financial system to a digital asset economy. With a global presence and multiple regulated entities, BitGo serves thousands of institutions, including many of the industry's top brands, exchanges, and platforms, and millions of retail investors worldwide. For more information, visit www.bitgo.com.

©2025 BitGo, Inc. (collectively with its parent, affiliates, and subsidiaries, “BitGo”). All rights reserved. BitGo Bank & Trust, National Association (“BitGo Bank & Trust”) is a national trust bank chartered and regulated by the Office of the Comptroller of the Currency (OCC). BitGo Bank & Trust is a wholly-owned subsidiary of BitGo Holdings, Inc., a Delaware corporation headquartered in Palo Alto, California. Other BitGo entities include BitGo, Inc. and BitGo Prime LLC, each of which is a separately operated affiliate of BitGo Bank & Trust.

BitGo does not offer legal, tax, accounting, or investment advisory services. The information contained herein is for informational and marketing purposes only and should not be construed as legal, tax, or investment advice. You should consult with your own legal, tax, and investment advisor for questions about your specific circumstances.

Digital assets are subject to a high degree of risk, including the possible loss of the entire principal amount invested. Past performance and illustrative examples do not guarantee future results. The value of digital assets can fluctuate significantly and may become worthless. No BitGo communication is intended to imply that any digital asset services are low-risk or risk-free. BitGo is not a registered broker-dealer and is not a member of the Securities Investor Protection Corporation (“SIPC”) or the Financial Industry Regulatory Authority (“FINRA”). Digital assets held in custody are not guaranteed by BitGo and are not subject to the insurance protections of the Federal Deposit Insurance Corporation (“FDIC”) or SIPC. Custody and other digital asset services are subject to eligibility, jurisdictional, and regulatory restrictions. Availability of specific products and services may vary by location and entity.

BitGo endeavors to provide accurate information on its websites, press releases, blogs, and presentations, but cannot guarantee all content is correct, completed, or updated. Content is subject to change without notice. BitGo disclaims any obligation to update or supplement such information except as required by applicable law or regulation.

BitGo makes no representation that the information contained herein is appropriate for use in any jurisdiction where its distribution or use would be contrary to law or regulation or would subject BitGo or any of its affiliates to any registration or licensing requirements in such jurisdiction. Persons who access this information are responsible for complying with all applicable laws and regulations.