U.S. Bank, the fifth-largest retail bank in the United States, announced Tuesday that it is launching a cryptocurrency custody service for institutional investors, potentially setting the stage for wider mainstream acceptance of digital assets.
As CNBC reported, U.S. Bank has partnered with New York Digital Investment Group, or NYDIG, to provide custody services for Bitcoin (BTC), Bitcoin Cash (BCH) and Litecoin (LTC). Gunjan Kedia, a senior executive at U.S. Bank’s wealth management and investment division, told CNBC that support for other cryptocurrencies like Ether (ETH) will be rolled out over time.
Fund managers and other institutional investors have been increasing their exposure to cryptocurrencies for most of the year. Their participation has grown significantly since the May 2020 Bitcoin halving event, which triggered renewed bullish sentiment for the leading digital asset and, by extension, the broader cryptocurrency market.
Grayscale Bitcoin Trust, which trades under the ticker symbol GBTC, has become a popular vehicle for institutional investors. As Cointelegraph reported, U.S. investment bank Morgan Stanley has doubled its GBTC holdings since April. The bank also added BTC exposure to 12 investment funds in April 2021.
U.S. Bank isn’t the first major financial institution to offer crypto custody services; major players such as State Street, Bank of New York Mellon and Northern Trust have also announced plans to custody cryptocurrencies.
Institutions are likely to express greater interest in cryptocurrencies as the asset class continues to grow and mature. On Tuesday, the cryptocurrency market reached a total capitalization of nearly $2.3 trillion, with Bitcoin fighting to reclaim $50,000.