U.S. Bank Doubles Down: Bitcoin Custody Services Resume for Institutional Clients

Wall Street meets blockchain—again. U.S. Bank just flipped the switch back on Bitcoin custody for institutional players, signaling that digital assets aren't just surviving—they're thriving.

Why Institutions Are Biting

Banks aren't exactly known for embracing disruption—unless there's profit involved. With Bitcoin's relentless climb and corporate treasuries eyeing crypto diversification, U.S. Bank's move isn’t bold—it’s business. They’re offering cold storage, insured custody, and regulatory compliance. Because nothing says 'trust' like a bank guarding the thing that was supposed to replace banks.

The Fine Print

This isn’t their first rodeo. The service relaunch follows a quiet pause—regulatory hurdles, maybe? Or just waiting for the heat to die down. Now, with clearer rules and hungry clients, they’re back. And they’re not alone. Rivals are circling, but U.S. Bank’s legacy name gives it an edge. Because in finance, sometimes the oldest tricks work best—even for the newest assets.

Bottom Line: Crypto’s not a rebellion anymore—it’s a revenue stream. And banks? They’ve always followed the money.

Regulatory clarity enables relaunch

The bank paused its custody offering following a Securities and Exchange Commission bulletin that increased capital requirements for banks holding client bitcoin.

However, recent rescissions of Staff Accounting Bulletin 121 and related guidance by the SEC and Office of the Comptroller of the Currency have cleared the way for banks to resume such activities.

Laura Cote, U.S. Bank’s head of global fund services product, stated:

Those two pieces really let us accelerate our reassuming of the service.

ETF market growth drives demand

Since the debut of spot bitcoin ETFs in the U.S. in early 2024, U.S. Bank has seen substantial growth in its ETF business.

The bank now services 33 bitcoin funds on the administrative side and provides support for 15 funds following digital asset strategies.

Of all U.S.-listed ETFs, U.S. Bank services 24%, according to Cote.

Currently, U.S. spot bitcoin ETFs hold 6.16% of all bitcoin in existence, as tracked by Bitbo.

Institutional focus and NYDIG partnership

The decision to limit custody services to institutional managers is driven by client demand rather than retail interest, Cote explained.

Many institutional clients currently custody bitcoin with firms like Coinbase, but U.S. Bank sees an opportunity to offer a regulated alternative.

NYDIG, as in the 2021 iteration, will handle sub-custody of client bitcoin holdings.

NYDIG CEO Tejas Shah commented:

Together, we can bridge the gap between traditional finance and the modern economy by facilitating access for Global Fund Services clients to bitcoin as sound money, delivered with the safety and security expected by regulated financial institutions.

Shift from retail to institutional holdings

The rise of spot bitcoin ETFs has marked a shift from bitcoin as a largely retail-held asset to increased institutional participation.

The total market value of ETF bitcoin holdings now exceeds $144 billion, reflecting this transformation in the digital asset landscape.