WisdomTree, has named Coinbase Custody as second custodian for its physically-backed Bitcoin exchange-traded product (ETP).
The WisdomTree Bitcoin ETP was listed on SIX, the Swiss Stock Exchange, in December 2019 with a total expense ratio of 0.95 percent. It aims to provide investors with a simple, secure and cost-efficient way to gain exposure to Bitcoin. The ETP allows investors to access Bitcoin without the need to hold the cryptocurrency directly, store private access keys or interact with the blockchain or digital currency infrastructure in any way.
Coinbase Custody offers access to an institutional-grade offline storage solution built around proprietary key generation protocols, which generate cold storage addresses for custody wallets. The solution leverages the same cold storage architecture that underpins Coinbase’s custody of more than $20 billion in crypto assets for its customers.
WisdomTree believes its appointment of Coinbase Custody as a second custodian highlights its ongoing commitment to delivering the safety and robustness investors have come to expect from WisdomTree ETPs. The move adds to the existing custody solution provided by Swissquote, a regulated and listed Swiss bank.
In addition to institutional class custody solutions for investors, the ETP wrapper has added new dimensions to the cryptocurrency universe, such as more liquid and transparent trading and a broader array of more sophisticated market participants entering the arena for these products.
Moving to a multi-custodian model could provide enhanced connectivity between WisdomTree and the wider cryptocurrency market, potentially providing greater liquidity for bitcoin, the underlying digital currency.
Jason Guthrie, head of capital markets and digital assets, Europe, WisdomTree, said: “A multi-custodian model further enhances the robustness of our operating set up, adding flexibility and enhanced security as we diversify service providers for a key function. Adopting a multi-custodian model signals our focus on innovations which benefit investors. Institutional interest in bitcoin continues to grow and this approach will resonate with those seeking the most robust security procedures for transacting in and safekeeping of cryptocurrencies”.
