Stock market today: Dow in fresh record close as Powell signals rate cut incoming
In a significant move for digital asset security, the iShares Ethereum Trust ETF (NASDAQ:ETHA), currently trading at $11.63 and commanding a market capitalization of $1.81 billion, has entered into a custodial services agreement with Anchorage Digital Bank N.A., as reported on Monday. According to InvestingPro data, ETHA has experienced significant price volatility, with the stock down 54% year-to-date and trading near its 52-week low of $11.26. This new partnership aims to bolster the Trust's safety measures by establishing segregated custody accounts for its ether holdings. For investors seeking deeper insights, InvestingPro offers 8 additional key tips about ETHA's performance and financial health metrics that could help inform investment decisions.
Anchorage, a national trust bank, will be tasked with the receipt, safekeeping, and maintenance of the Trust's assets, implementing cold storage to ensure private keys associated with the Trust's ether are offline and less susceptible to hacking. This method contrasts with hot storage, where keys are online and more accessible but at a higher risk. With ETHA's price showing high volatility and currently trading 63% below its 52-week high of $31.18, security measures have become increasingly crucial for investor confidence.
The Trust's existing custody arrangements with Coinbase (NASDAQ:COIN) remain intact, and no immediate plans to transfer assets to the new custodian have been announced. The decision to engage Anchorage reflects the Trust's commitment to risk management amid its growth and the expansion of its digital asset footprint.
The agreement outlines procedures for handling potential forks in the ether blockchain, with Anchorage having the discretion to support or discontinue support for branches, while making commercially reasonable efforts to maintain service continuity.
Anchorage will be indemnified against losses stemming from the Trust's material breaches, legal violations, or misconduct. Additionally, the custodian is required to uphold specific insurance coverages.
This development, based on a press release statement, emphasizes the Trust's proactive approach to safeguarding its digital assets and adapting to the evolving landscape of cryptocurrency custody solutions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.