Today Zodia Custody announced its latest digital asset custody client, 21shares, the asset manager with around $6 billion in crypto under management. Zodia Custody was founded by Standard Chartered and Northern Trust, with SBI and National Australia Bank as investors.
In April Zodia announced it signed another asset manager, Deutsche Bank’s DWS. While DWS is a big brand, it manages only around €10 million ($11m) in crypto so far. By contrast, the European and Swiss arms of 21 shares, which are part of this custody deal, are responsible for more than $3 billion.
The asset manager has no less than 40 exchange traded products (ETPs) in Europe. You’d expect the Bitcoin and Ethereum staking ETPs to be big, and they account for around $1.1 billion, but they don’t make up the majority. Some of the prominent second tier tokens have less ETP competition. Hence, the Binance BNB ETP has a capitalization of $572 million and the Solana staking ETP is $735 million.
As part of its research, 21shares found that by the end of Q1 2024, 937 professional investors owned $11 billion in U.S. spot ETFs, making up around one fifth of the U.S. ETF assets. Comparing that to the first gold ETFs, they had 95 professional investors in their first quarter. That said, we note the unusual scenario of 11 crypto ETFs launching around the same time, making comparisons challenging.
“ETPs promise a lot of potential, and institutional demand is loud and clear,” said Julian Sawyer, CEO of Zodia Custody. “We’ve listened. That’s why we have partnered with true market leaders in the ETP digital asset space, 21Shares, to deliver a partnership that will have a real impact on the whole ecosystem – without any compromise on security, risk management, or compliance.”
There’s been considerable concern stateside about Coinbase looking after the custody of such a large proportion of the ETF assets. Outside the United States, there are more options including institutional ones such as Zodia.
“This collaboration marks a significant milestone in our commitment to providing top-tier investment opportunities for our clients,” said Mandy Chiu, Head of Financial Product Development at 21 Shares. “Zodia Custody’s industry-leading cold storage infrastructure and streamlined compliance solutions have enhanced our offerings, ensuring our investors benefit from the most advanced and diversified custodial services available.”
This is the latest in a string of new client signings. Which is why National Australia Bank Ventures announced it invested in Zodia Custody last week.
