Holding Digital Assets: A Guide for Institutional Investors

Holding Digital Assets: A Guide for Institutional Investors

Many institutional investment firms desire to pursue the unique opportunities presented by the crypto finance markets. However, investors often express concerns about their ability to hold their digital assets in a manner that is both secure and legally-compliant. Strategic Coin wants institutional firms to be able to navigate the burgeoning crypto finance industry with confidence, which is why they provide investors with the educational materials and in-depth market research reports they need to capitalize on market opportunities as they arise.

Below, this article explains how institutional investors can hold digital assets while remaining legally compliant:

Custodial Accounts

Institutional investors should store their digital assets with a regulated custodian that provides clients with segregated accounts. These custodians will place the coins or tokens in deep cold storage, which means that the funds are stored offline on a system that has never been connected to a network of any kind. These security measures ensure that the funds cannot be compromised by a cyber attack.

Ledger and Xapo both offer regulated custodial services that support a wide variety of cryptocurrencies and tokens. Another prominent custodian is Gemini, which offers institutional trading services in addition to its custodial service. Gemini is convenient for firms who desire to actively participate in cryptocurrency trading. However, the only cryptocurrencies this platform currently supports are bitcoin (BTC) and ether (ETH).

Trusts & ETFs

Firms can also gain exposure to the price movements of bitcoin, ether, and other cryptocurrencies by investing in a cryptocurrency trust or ETF. Shares in these funds often trade at a premium over the price of the asset itself, but they save investors from having to handle the technical risks and responsibilities of buying, selling, and storing digital assets.

Grayscale Investments, a subsidiary of the Digital Currency Group, offers two publicly-quoted securities that track the price of cryptocurrency: the Bitcoin Investment Trust and the Ethereum Classic Investment Trust. Unfortunately, the SEC has not yet approved a cryptocurrency ETF, but industry observers expect that the agency will approve one in the near future.

Strategic Coin is your go-to source for cryptocurrency investment research and education. Whether you need help understanding the basics of blockchain technology or desire to read an in-depth analysis of the latest initial coin offering, Strategic Coin will provide you with the information you need to take advantage of market opportunities within the crypto finance industry.