Coinbase's Stranglehold on Crypto Custody

Bitwise highlights Coinbase's dominance in crypto custody for spot ETFs.

The exchange serves as custodian for 9 of the 11 spot Bitcoin ETFs and 8 of the 9 spot Ethereum ETFs, accounting for approximately $74 billion out of a total $91.7 billion in Bitcoin ETF assets under management.

Coinbase has been custodying crypto assets for institutions for over 12 years, making it the obvious choice for issuers seeking regulatory relationships and battle-tested cold storage infrastructure when the SEC greenlit spot Bitcoin ETFs in January 2024.

Not all issuers rely solely on Coinbase, with some using other custodians like Fidelity Digital Assets or Gemini. However, the vast majority of ETF assets still flow through a single provider, making Coinbase's dominance a point of concern for the industry.