Cryptocurrency custody has become a cornerstone of institutional investment, with security remaining the foremost concern for asset managers, hedge funds, and financial firms.
Two leading providers, BitGo and Bakkt, have emerged as trusted custodians, each employing distinct security protocols to safeguard digital assets.
BitGo is a global company specializing in cryptocurrency custody solutions tailored for institutional clients. Headquartered in Palo Alto, California, it also has operational offices in London, Singapore, and Tokyo. The company provides various wallet options, including hot wallets, SAFE custodial wallets, and self-managed wallets, offering different levels of security and control.
For clients willing to engage in more risk, BitGo extends financial services such as cryptocurrency trading, borrowing, lending, staking, and access to decentralized finance (DeFi) platforms. Additionally, it serves as the exclusive custodian for wrapped Bitcoin (WBTC), enabling Bitcoin transactions within the Ethereum network.
Fees
BitGo applies a monthly fee structure based on the number of wallets and the total assets under custody. The fees range between 0.05% and 0.15% per month, depending on the asset type and service tier.
Regulatory Compliance
BitGo operates as a Qualified Custodian, regulated and audited by the South Dakota Division of Banking and the New York Department of Financial Services (NYDFS).
Insurance Coverage
The company provides insurance coverage of up to $250 million for cold storage assets, specifically covering the theft or loss of private keys.
Bakkt, headquartered in Alpharetta, Georgia, provides secure custody services for institutional cryptocurrency investors. Unlike some custodians, Bakkt does not engage in lending or rehypothecation, ensuring that client assets remain under their full ownership. The company also offers multi-zone physical storage and around-the-clock customer support for its custody clients.
Fees
Bakkt applies a monthly custody fee of 0.1% for Bitcoin and 0.2% for Ethereum, with a minimum charge of $100 per month.
Regulatory Compliance
Bakkt Trust Company LLC is a Qualified Custodian, regulated by the New York Department of Financial Services (NYDFS).
Insurance Coverage
The company states that its custody services are insured according to policy limitations, though specific coverage details are not publicly disclosed.
While both companies adhere to strict regulatory standards and implement advanced protective measures, their approaches differ significantly in key management, storage methodologies, and operational security.
Multisignature vs. Multi-Party Computation
At the heart of any cryptocurrency security system is private key management. BitGo and Bakkt take fundamentally different approaches.
BitGo employs multisignature technology, a well-established security protocol requiring multiple cryptographic signatures to approve transactions. Typically, BitGo operates with a three-key system: one held by BitGo, one by the client, and one as a backup. This ensures that a single compromised key does not jeopardize an entire wallet. This method is widely used across the industry and is supported by many blockchain protocols.
Bakkt, on the other hand, uses Multi-Party Computation (MPC). Unlike multisignature, MPC distributes a private key among multiple parties, ensuring that no single entity ever possesses the full key. This reduces the risk of key theft and eliminates the need for blockchain-native multisig support. MPC also allows for more flexible policy enforcement, including role-based access controls and automated approvals.
BitGo’s multisignature model offers a simpler and battle-tested solution, whereas Bakkt’s MPC approach enhances security by removing a single point of failure. Institutions must weigh the reliability of multisignature against the advanced protection of MPC when selecting a custodian.
BitGo and Bakkt Cold vs. Warm Storage
Both BitGo and Bakkt rely on cold storage—the gold standard for digital asset protection—but differ in how they balance access and security.
BitGo stores the majority of assets in cold wallets, which are air-gapped and isolated from the internet. This drastically reduces the attack surface for hackers. Transactions from BitGo’s custodial wallets must pass strict security checks before execution. The company also offers self-custody solutions, allowing institutions to maintain greater control over their private keys.
Bakkt integrates a mix of cold and warm storage, employing a tiered custody structure. The Bakkt warehouse manages fund segregation and dynamic allocation between cold and warm wallets. This provides institutional clients with liquidity optimization, enabling faster withdrawals while maintaining strong security protections. Assets remain in a highly controlled environment with biometric security, armed guards, and multi-factor authentication.
While BitGo prioritizes a traditional cold storage model for maximum security, Bakkt’s approach balances security with operational efficiency, appealing to institutions needing frequent access to funds.
Regulatory Oversight and Insurance Protections
Regulation is crucial in institutional crypto storage. Both BitGo and Bakkt are qualified custodians, ensuring compliance with financial industry standards.
BitGo Trust Company is regulated by the South Dakota Division of Banking and has achieved SOC 2 Type 2 certification, demonstrating adherence to stringent security protocols. BitGo also maintains a $100 million insurance policy, covering losses from theft and cybersecurity breaches. As of 2025, BitGo supports 80 of the top 100 digital assets, making it one of the most versatile custodians in the industry.
Bakkt Trust Company LLC operates under the supervision of the New York Department of Financial Services (NYDFS) and holds both SOC 1 Type 2 and SOC 2 Type 2 certifications. With a $125 million insurance policy, Bakkt provides additional financial safeguards. The company’s institutional-grade custody service is integrated with its trading platform, enabling seamless asset transfers within a fully regulated ecosystem.
Both firms meet high regulatory standards, but Bakkt’s NYDFS oversight and higher insurance coverage may appeal to institutions prioritizing regulatory compliance and risk management.
Which Custodian is Best for Institutional Clients?
BitGo and Bakkt offer industry-leading security measures, but each excels in different areas. BitGo’s multisignature model and extensive asset support make it a strong choice for institutions looking for a proven custody solution with broad blockchain compatibility. Meanwhile, Bakkt’s MPC-based security, integrated trading features, and higher insurance coverage cater to firms requiring a seamless custody and liquidity management solution.
As custodians refine their security frameworks, the choice between BitGo and Bakkt will depend on whether institutions prioritize multisignature’s reliability or MPC’s next-generation security advancements. Further to BitGo and Bakkt, a wide range of service providers are now entering the sector – each offering a unique perspective and client profile for the secure storage and transfer of digital assets.
