21Shares has chosen Anchorage Digital to handle custody for its spot Bitcoin and Ethereum ETFs. This marks Anchorage as the fourth custodian in the $60 billion U.S. spot crypto ETF market. Currently, Coinbase holds a hefty 80% of that market, which raises some concerns about concentration risks.
This new partnership is good news for investors. Until now, most spot Bitcoin and Ethereum ETFs in the U.S. have relied on Coinbase for custody. The only exceptions are Fidelity, which manages its own assets, and VanEck, which works with Gemini.
Kinga Bosse, the chief operating officer at MPCH, a crypto infrastructure firm, pointed out the risks of depending on a single custodian. She said, "In traditional finance, the custody market isn’t completely decentralized, but they have large, established organizations managing it."
Anchorage Digital, a federally chartered crypto bank, announced it will provide custody for ARK Invest and 21Shares’ spot Bitcoin ETF, known as ARKB, and for 21Shares’ spot Ethereum ETF, CETH. Since launching on January 11, ARKB has gathered $3 billion in assets, making it the third most successful Bitcoin ETF this year, right behind BlackRock and Fidelity. It’s also the fourth largest when you include Grayscale’s GBTC.
As for CETH, it has attracted $9 million since its launch on July 23, making it the smallest Ethereum fund at this time.
Bosse, who previously led strategic investments at State Street, emphasized the risks Coinbase faces by managing such a large portion of the market. She remarked, "I don’t think even Coinbase would disagree that risk needs to be diversified."
She added, "This isn’t a monopoly game. It’s not like Google is grabbing market share. We’re talking about security, people’s money, and liability. That responsibility should be shared."