Investors Rush to Custodial Solutions Amid Crypto ETF Approvals, Bitget Report Reveals

Bitget has published a fresh report, highlighting a number of key trends in the cryptocurrency market.

Bitget, a prominent cryptocurrency exchange, has published a report spotlighting the utilization of custodial wallets across diverse segments of market participants. This document not only offers crucial insights into investor behavior and market dynamics but also delves into the broader development of the crypto economy.

Drawing on data from Bitget’s third-party custodial accounts, established in collaboration with digital asset custody providers like Copper and Cobo since August 2023, the research aims to elucidate the correlation between various market indicators and the duration of custodial crypto wallet usage. Here are the key findings:

Firstly, total assets under custody have witnessed an impressive surge of 250% over the past four months, particularly during the anticipation and eventual approval of the BTC ETF. Secondly, custodial accounts have nearly doubled since November 2023.

Thirdly, 43% of custodial account holders with short-term interests repeatedly deposit funds into their accounts. Lastly, approximately 77% of all custodial accounts are utilized for short-term purposes, indicating a strategic pursuit of opportunities.

A deeper dive into the research reveals that the uptick in custodial accounts correlates with the overall performance of the crypto market and the escalating anticipation of a bullish trend among users. Moreover, the increasing integration of cryptocurrencies into daily life and macroeconomic factors like local conflicts and geopolitical tensions contribute significantly to users seeking financial refuge in cryptocurrencies to safeguard their savings.

Of notable importance is the focus on institutional adoption, evidenced by the growing interest in Bitcoin and Ethereum ETFs, which has led to a surge in investors utilizing custodial solutions. Coupled with Bitcoin price fluctuations, these factors are cited as the primary drivers behind the remarkable 250% increase in assets under custody within just four months.

Market-wide statistics underscore that short-term storage predominantly drives users to adopt custodial wallets. These users exhibit heightened activity levels and typically maintain balances exceeding $100,000 for less than three months. This trend became particularly evident in November 2023, coinciding with a sharp increase in trading volumes across the market, prompting more users to open new accounts and capitalize on emerging opportunities.

Gracy Chen, Managing Director of Bitget, acknowledges this captivating trend within the cryptocurrency space.

She emphasizes the dynamic nature of the crypto economy and anticipates that the recent approval of Bitcoin ETFs will further accelerate cryptocurrency adoption. Bitget remains committed to providing valuable insights and solutions to its users, facilitating their navigation through the evolving landscape of digital assets.

“Bitget’s latest study highlights a captivating trend within the cryptocurrency space,” she said.

“The indicators Bitget used for conducting the research included both open data, such as crypto market capitalization and custodial wallet account numbers, as well as more specific data, such as institutional investor engagement. The statistics underscore the dynamic nature of the crypto economy and we expect the recent approval of Bitcoin ETFs to accelerate cryptocurrency adoption further.

“As we continue to witness this growth, Bitget remains committed to providing valuable insights and solutions to our users, helping them navigate the ever-evolving landscape of digital assets,” Chen concluded.