Although some experts believe that self-custody is one of the genuine purposes of cryptocurrencies, this way of storing cryptocurrencies is not really suitable for everyone, according to a WisdomTree executive.
Will Peck, head of digital assets at the New York asset manager WisdomTree, believes that self-custody will be a growing trend in the future, but custody solutions should not be underestimated.
Some cryptocurrency users prefer self-custody, and WisdomTree supports and respects that decision, the executive said in an interview with Cointelegraph. “That will be a growing segment of the market, and over time we want to create products and services for them,” he claimed.
Since self-custody requires some technical knowledge and the responsibility not to lose the private keys, many may find self-custody too uncomfortable or complicated to manage, Peck said.
“Of the billions of people and the many institutional investors on the planet, a large number will lack the technical means, workflows, or interest in holding their own private keys, which introduces a different set of complexities and risks” , said the WisdomTree executive.
According to Peck, well-structured custody solutions, including products such as cryptocurrency exchange-traded products (ETPs) or regulated custody tools, can make crypto more accessible to a larger number of people. However, vigilance and understanding of what users actually sign is required to prevent any risky activity with client assets.
“If you’re worried about ‘it’s not your keys, it’s not your coins,’ you just need to understand who this firm is, what their reputation is, how they’re implementing regulation, or not implementing regulation,” Peck said. He added that self-custody has been a trend in the community in recent months, as companies like crypto lender Celcius were pausing withdrawals due to liquidity issues amid the massive crypto winter of 2022.
“They were doing incredibly risky things with those deposits,” Peck noted.
The recent statements from WisdomTree’s head of digital assets come on the sidelines of the debut of its proprietary custody wallet solution, WisdomTree Prime. The platform aims to offer exposure to major cryptocurrencies such as Bitcoin (BTC) and Ether (ETH), as well as tokenized versions of physical assets such as the US dollar and gold.
WisdomTree, one of the largest cryptocurrency ETP providers, has launched eight ETPs on crypto assets on Börse Xetra, SIX, the Swiss Stock Exchange, and the Euronext exchanges in Amsterdam and Paris. With the launch of WisdomTree Prime, the company hopes to expand its operations beyond ETP issuance. The wallet is currently in beta and is expected to launch in late 2022.
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