1/ We have analyzed the Digital Asset Custody landscape. Digital assets, like Bitcoin, present new challenges that legacy financial firms aren't equipped or familiar with. We have broken down the custody space into two segments, Institutions and Consumer. theblockcrypto.com/genesis/53485/… 
2/ Early adopters operate on the mantra, “Not your keys, not your coins”, however, this is not ideal for all users nor is it possible, at least in the U.S., for institutions managing more than $150 million that are required by law to have their assets safeguarded by a custodian
3/ For this reason, custody is a critical link for the institutional adoption of digital assets. In 2018 and 2019 we saw a surge of custody firms and services entering the market aimed primarily at institutional investors, many backed by the most prominent traditional firms
4/ We found a shifting dynamic where newly founded companies are seeing a greater market opportunity in serving an institutional clientele. 79% of consumer vendors were formed by 2016. Whereas for institutionally focused vendors, approximately 67% were formed after 2016
5/ The most popular hardware wallet producers, including Trezor, Ledger, and Coinkite were formed by 2014. A lack of newer participants, suggests these brands have built a stronghold in the market and potential new players don’t see many unexplored market segments.
6/ Our sample includes a total 71 investment deals dating back to 2012. Custody of digital assets has seen approximately $1.3 billion in investment, with approximately $415 million allocated to pure digital asset custody firms.
7/ A trend we identified is Pure custody companies saw capital injections during bear market conditions, after large swings price of Bitcoin. In 2014 and 2018, investment saw an increase of 7,404% and 1,272% YoY, respectively
8/ The formation of custody companies often coincided with Bitcoin price increases, which could explain why early-stage venture capital dominated in 2013 and 2014 (BitGo & Xapo).
9/ After 2015, investment in new custody ventures dried up and instead late-stage venture capital investments dominated from 2015 to 2017. Coinbase was scaling, raising capital and was largely responsible for this late-stage investment dominance.
10/ 2018 & 2019 saw investments in early-stage and seed round custody ventures increase. Some of these particular ventures in no specific order include Ledger, Knox Custody, Unchained Capital, BitGo, FireBlocks, Argent, Vo1t, Hex Trust, Anchorage, Casa, Onchain Custodian, & Curv
11/ 2019 was the first year we saw a major custody acquisition. With more custody suppliers than institutional demand, the market seems ripe for M&A transactions this year similar to Coinbase’s acquisition of Xapo’s Institutional service.
12/ We sorted through the 71 investments in custody companies and created this visualization to show which investors, who have at least one investment in the space, are focused where.
13/ Some interesting finds: Two technology giants, Microsoft (M12) and Google (GV) have each made an investment through their ventures arms, with Microsoft betting on Bakkt, a futures exchange and custody provider and Google betting on the wallet and exchange provider Blockchain
14/ Samsung, the electronics conglomerate, invested in Ledger, producer of the most popular hardware wallet and provider of institutional custody services through Ledger Vault.
15/ There are two state-owned entities that have invested in digital asset custody companies. Singapore’s wealth fund responsible for allocating over $100 billion, made an investment in Coinbase. Swiss Post, the national postal service of Switzerland, made an investment in METACO
16/ The median number of investments among the most active investors is 3 deals. Digital Currency Group is the most active investor in the custody space with 8 investments.
17/ It's interesting to see which of the investors also use their portfolio company's services for their own assets. For example, Blockchain Capital and Andreessen Horowitz are both investors in Anchorage and use the firm's custodial services.
18/ Galaxy Digital has invested in BitGo, Xapo (now part of Coinbase Custody), and Bakkt but has opted to use Bakkt and Fidelity Digital Assets as its custodians.
19/ Digital Currency Group signed on with Coinbase to custody its reported $2.7 billion AUM but is an investor in BitGo, Ledger, Paxos, Curv, all of which offer institutional custody services.
20/ To sum all of this up.. Digital asset custody solutions have received $1.3 billion in investment, with $415 million of it representing pure custody companies. The focus of custodial services has shifted from consumer to institutional, and we may see consolidation in the space
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