Nearly half of institutions planning to add crypto exposure in 2026 cite better infrastructure as a reason. Custody, settlement, and risk controls rank among the main reasons, according to a Coinbase and EY-Parthenon survey of 351 firms.
The question has moved from what an exchange lists to how it lets capital move in and out. Equity markets have run on that split between broker and custodian for decades. Now, crypto exchanges are rebuilding around the same demand.
A custody arrangement is only the starting point. Asset managers, market makers, and other institutional investors arrive with different requirements. An exchange that wants their business has to adapt to each of them.
Bitget is one of the exchanges making that adjustment. The company says institutional business is the focus of its ninth year.
Part of that is supporting more than one custody model instead of a single required setup. Bitget links the move to its Universal Exchange strategy, which already spans crypto and tokenized assets. A key question is how much risk that separation removes, and where it simply moves it.
Off-Exchange Settlement Lets Institutions Trade Without Handing Over the Keys
Off-exchange settlement separates where assets are held from where they are traded. A fund keeps its holdings with a third-party custodian such as Copper or Fireblocks.
The custodian locks a portion of those assets and reports the balance to the exchange. The exchange treats that balance as trading credit, so the fund can buy and sell as if it had deposited.
Profits and losses are then netted and settled between the custodian and the exchange at set intervals. Copper’s ClearLoop, for instance, settles with connected venues on fixed cycles rather than instantly.
More hedge funds now have a reason to care about the mechanics. Just over half (55%) of traditional hedge funds held digital assets in 2025, up from 47% a year earlier, according to the 2025 AIMA and PwC Global Crypto Hedge Fund Report.
Most still keep allocations below 2% of assets, and 71% plan to add. Larger positions make custody, counterparty exposure, and execution harder to leave to chance.
The appeal is capital efficiency and lower direct exchange exposure. Because eligible collateral remains with the custodian rather than being held directly on the exchange, the structure can reduce the amount of client assets directly exposed to venue-level counterparty risk.
Firms trading on several venues avoid moving collateral back and forth, which cuts both cost and operational risk.
The structure does not remove market risk. A losing position is still liquidated, whatever the collateral’s location. The custodian also becomes a counterparty in its own right. Between settlement cycles, gains owed by the exchange are a claim rather than custody, and that window is where the model gets tested.
Institutional Clients Arrive With Different Custody Needs, and Bitget Builds for Each
Institutions are already spreading their custody bets. In the Coinbase and EY-Parthenon survey, 61% of invested firms used more than one custodian, most citing risk reduction. An exchange that insists on a single custody route is asking those firms to unwind that choice.
Regulated asset managers sit at one end. Fiduciary duties and asset segregation rules often require an independent, regulated custodian before a trading venue is even considered.
Bitget works with regulated custody providers. This includes its live relationship with Sygnum. The company is also engaging with regulated custodians such as Komainu, a regulated custodian founded by Nomura, CoinShares and Ledger.
Market makers and quantitative firms sit at the other end. They trade across many venues and care about how fast collateral can be redeployed. Bitget’s long-standing integration with Copper ClearLoop serves that model. Eligible clients access Bitget while their assets stay inside Copper’s infrastructure.
Bitget lists Cactus Custody Oasis, Fireblocks Off Exchange, OSL MirrorEX and Bitfire PrimeMirror as further custody and settlement relationships. The company says different kinds of professional capital should reach the same markets without being made to hold assets the same way. A client that keeps its existing custodian can also avoid some asset transfers and operational steps.
Choice of Custodian Is the New Differentiator, and the New Concentration Risk
Off-exchange settlement itself is no longer rare. Copper’s ClearLoop now connects several venues, including Coinbase International, Kraken MTF, and Deribit. Fireblocks Off Exchange reaches several of the same exchanges.
What separates exchanges now is how many custody routes they offer and how many are regulated. Bitget says expanding ties with regulated custodians is a priority as it courts a wider range of investors.
The company frames custody as one layer of a broader institutional build-out. The others are settlement connectivity, trading and liquidity, and eventually capital management services. Bitget positions all of it under its Universal Exchange strategy, where portfolios increasingly mix crypto with tokenized traditional assets.
That shift changes what an exchange is for. If clients hold assets elsewhere, the venue competes on access, liquidity, and execution rather than on custody. It also moves risk into a narrower set of hands. A few custodians and settlement networks now sit beneath many exchanges at once. An outage at one could reach all of them.
For the industry, the next test is how increasingly interconnected custody and settlement models perform under stressed market conditions. Diversifying custody relationships can reduce dependence on a single provider, while also introducing different settlement arrangements that venues and institutions need to manage.
