Study says Bitcoin can be at risk due to subpar safekeeping

Tuesday 11 May 2021 10:02 CET | News

Management consultancy firm Opimas estimates that over USD 190 billion worth of Bitcoin is currently at risk due to subpar safekeeping.

A new research report from Opimas looks at the landscape of cryptocurrency custody-enabling technology providers and institutional-grade cryptocurrency custodians as well as the size of the market for cryptocurrency custody and brokerage services.

Some key findings in the report include:

  • Many of even the largest holders of Bitcoin and other digital assets continue to rely on storage devices meant for individual investors. In total, about 22% of institutional cryptocurrency holdings are safeguarded in relatively risky manners.

  • No custody solution is equal - there is still no best practice when it comes to security and governance relating to private keys. For example, some providers may rely on time-tested Hardware Security Modules (HSMs), while others use a newer technology known as Multi-Party Computation (MPC).

  • Opimas estimates that the current annual revenues generated by the institutional crypto brokerage and custody market are roughly USD 2 billion and will grow to nearly USD 8 billion by 2026 - a sizeable portion of this coming from brokerage services.

  • Regulations surrounding institutions' ability to store cryptocurrency have become clearer (and in some cases more favorable) in numerous jurisdictions. With the advances in brokerage and custody solutions, Opimas expects institutional cryptocurrency holdings to grow from 20% of the cryptocurrency market cap to over 50% by 2026.

More: Link

Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: research, cryptocurrency, regulation, digital assets, cybersecurity
Categories: Blockchain & Cryptocurrencies | Cryptocurrencies
Countries: World
This article is part of category

Blockchain & Cryptocurrencies