Big investors who’ve soured on cryptocurrencies because of the industry’s billion-dollar theft problem will soon have a new way to trade that’s touted as a safer solution.
By the end of the month, BitGo Inc.’s customers will be able to buy or sell Bitcoin, Ether and other digital assets without the coins ever leaving cold storage — in other words, they’ll stay on devices not connected to the internet, making them harder to steal.
BitGo is offering this through a partnership with Genesis Global Trading Inc., a trading firm.
Hacking is a major problem. Almost $1 billion worth of cryptocurrencies was stolen in the first nine months of last year, according to blockchain security firm CipherTrace.
Crypto prices have plunged over the past year, and the big, institutional clients BitGo wants to lure in could bring enough trading firepower to fuel a rebound.
BitGo wants to “introduce market structure to crypto that’s never existed before,” Chief Executive Officer Mike Belshe said in an interview. Being able to buy or sell in offline-mode means coins aren’t sent to exchanges, cutting the risk of theft, human error or running afoul of compliance requirements, he added.
Genesis Trading will match BitGo customer’s buy and sell orders, CEO Michael Moro said. Trading coins in cold storage could reduce another problem for investors: the risk that prices move against them during the day or two it currently takes to load the coins into an exchange’s hot wallet so they can be traded.