BitGo to Provide Custodial Services to Europe's Largest Crypto Exchange

Neil Dennis

BitGo, the California-based digital wallet company, is to expand its relationship with Bitstamp by providing custodial services to Bitstamp, Europe's oldest and largest cryptocurrency exchange by trading volumes.

Bitstamp announced that it would start transferring assets to BitGo's wallets on Thursday, October 10, and that customers would not be affected and need take no action. The companies declined, however, to disclose the value and types of digital assets to be held under the custodial service. The statement continued:

The security of our customers’ funds is always our highest priority at Bitstamp. With BitGo Custody, Bitstamp’s assets will be secured on 100% cold storage technology in bank-grade class III vaults and protected by BitGo’s $100 million insurance policy.

Indeed, BitGo is insured through Lloyd's of London and the policy covers against theft or the loss of cryptographic keys.

Existing Relationship

The two companies already have a working relationship as Bitstamp has used BitGo's hot wallet for several years. David Osojnik, Bitstamp's chief technical officer, said that BitGo has been one of its "most trusted partners for many years" and that the move is a "natural extesion" of their relationship.

Per his words, BitGo's "exclusive focus on institutional services has allowed them to develop the tech and processes necessary for running a robust and compliant cryptocurrency exchange."


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Binance and OKEx Represented Approximately 75% of Top Tier Exchanges' Trading Volume in June

Two cryptocurrency exchanges represented three-quarters of the spot trading volume seen in June. The exchanges, OKEx and Binance, traded over $80 billion combined.

According to CryptoCompare’s June 2020 Exchange Review, Binance was the largest top tier cryptoassets exchange by volume in June, trading $41.8 billion throughout the month, 19.6% less than what it traded in May. It was followed by OKEx, which traded $40.6 billion in June, down 29% from May.

In third place came Coinbase, which traded $6.86 billion, down 38.5%. In total Binance and OKEx represented approximately 75% of the trading volume on the top 15 top tier exchanges.

er.pngSource: CryptoCompare

The same report found, as CryptoGlobe reported, that spot trading volumes plummeted throughout the month of June. Top tier cryptoassets exchanges saw their volumes “decreased drastically” to $177 billion, which means they traded 36% less than in May, while lower-tier exchanges traded $466 billion, 53% less than in May,

The highest recorded trading volume in a single day in June amongst top tier exchanges was of $9.26 billion.  In comparison, in March’s Exchange Review, the cryptoassets data provider revealed that the March 12-13 crypto market crash led to high in daily trading volumes, as $75.9 billion were traded across exchanges in a single day. Top-tier exchanges traded $21.6 billion that day.

Whether a cryptoasset exchange is lower-tier or top tier is determined by CryptoCompare’s Exchange Benchmark. The trading volume drop affected both top and lower-tier platforms, as the crypto space’s spot volumes ended up representing “roughly half of the daily volumes seen in the previous month.”

OKEx and Binance Stand Out

OKEx and Binance were the two top tier cryptoassets trading platforms standing out, and they likely managed to do so because of Coinbase’s own downfalls and because of their diverse offerings to users.

Coinbase likely saw its trading volume dwindle over repeated outages it suffered during significant cryptocurrency price movements, while other users opposed Coinbase’s, and likely moved to other trading platforms.

Meanwhile, Binance and OKEx have solidified their offerings to users, allowing them to earn interest on their cryptocurrency holdings, and enriching their derivatives portfolios with various cryptoassets. As CryptoGlobe reported, OKEx has last month expanded its derivatives portfolio with ETH/USD options, with EOS/USD options planned for the near future.

 Both also offer discounts to their users if they use their tokens, Binance’s BNB, and OKEx’s OKB. Notably, OKEx’s OKB has significantly outperformed both BNB and bitcoin over the last 12 months.

graph.pngSource: CryptoCompare

Over the last 30 days, Binance’s cryptocurrency outperformed that of its rival bitcoin trading platform, as BNB dropped 6.1% over said period, while OKB dropped 9.9%. Bitcoin, in comparison, dropped 3.9%.

Featured image via Unsplash.