Custody (Crypto)

Custody in crypto means a third party safely holds and manages your digital assets (like Bitcoin or Ethereum) on your behalf, similar to how a bank holds your cash. You encounter this when using exchanges, investment apps, or institutional services—they're the custodian. It matters because holding crypto yourself requires technical knowledge and security precautions; a custodian handles that complexity, though you're trusting them with your assets. For example, if you buy Bitcoin through a major exchange, that exchange typically acts as custodian, storing your coins in secure vaults rather than you managing private keys (the passwords that unlock crypto) yourself. The tradeoff: convenience and safety versus less direct control.