Bitcoin is much more expensive than gold to store with a third-party custodial service, but there’s a good reason for that discrepancy.
On Monday, the Motley Fool published an article analyzing how the cost of storing physical gold bars compares to storing bitcoin — the new “digital gold” with a third-party custodial service. Noting that the SPDR Gold Trust pays approximately 0.08 percent of the value of its gold for storage and custody, the publication found it “mind-blowing” that bitcoin custodial services such as Coinbase Custody charge 15 times more.
As CCN has reported, Coinbase Custody — a regulated storage service targeted to institutional investors making minimum deposits of $10 million — expects to charge a $100,000 setup fee and a 10 basis point (0.10 percent) fee per month on the value of client assets after it launches in 2018.
“If gold can be stored in Fort Knox-like bunkers for just 0.08% per year, there is little reason it should cost 15 times more for bitcoin to be stored in similarly safe solutions,” author Jordan Wathen wrote.
However, Trevor Gerszt, CEO of self-directed IRA custodial services Goldco Precious Metals and CoinIRA, says that crypto asset storage providers must account for significant cybersecurity risks that precious metals storage facilities do not face.