Crypto Long & Short: Redefining the Custody Standard for Banking
The newsletter 'Crypto Long & Short' discusses key themes in the cryptocurrency and blockchain space. Key insights include Sygnum Bank's Pascal Eberle highlighting a shift in custody models from centralized trust to cryptographic accountability using multi-signature technology for better security and transparency. CoinDesk Indices' Andy Baehr reflects on the crypto market's stagnant mood, comparing it to previous bullish cycles driven by Bitcoin, Ethereum, and other assets. He notes that the crypto market is awaiting a new narrative or leader to spark a rally. Additionally, the 'Chart of the Week' indicates ETH's recent price rise is driven by institutional flows rather than underlying utility or high DeFi yields. Lastly, the newsletter provides updates on industry events, expert interviews, and financial products tied to the crypto ecosystem.
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Introduction to Crypto Long & Short Newsletter
Welcome to the institutional newsletter, Crypto Long & Short. This week:
- Pascal Eberle of Sygnum Bank writes about how custody is less about just holding assets and more about ensuring they are held correctly.
- Andy Baehr of CoinDesk Indices provides a 'Vibe Check', discussing the crypto market's anticipation of new leadership to spark a rally.
- In 'Chart of the Week', we analyze ETH prices relative to DeFi pool yields and BTC/ETH funding rates.
These insights provide a broader perspective on the evolving crypto landscape.
Redefining the Custody Standard for Banking
Expert Insights: By Pascal Eberle, Chief of Staff, Sygnum Bank
The divide between traditional and future finance is disappearing rapidly. By adopting blockchain-native features, regulated institutions are revolutionizing custody models. Instead of just holding assets, multi-signature technology (multisig) is establishing cryptographic accountability.
- Legacy Weaknesses: Traditional custody relies on centralized control, requiring clients to place blind trust in institutions. Regulations vary, with some regimes like Switzerland offering client protections. Yet, institutional trust still remains a key risk factor.
- Breakthrough with Multisig: Multisig distributes control and ensures transactions need multiple approvals. Clients are empowered to hold their own keys, enhancing transparency, accountability, and on-chain security.
The shift is as much philosophical as it is technological—'Don't trust, verify' becomes the new norm.
The Multisig Revolution: Enhanced Transparency & Control
Multi-Signature Technology Transforms Custody
Instead of relying on centralized entities, multisig wallets distribute control across multiple parties, eliminating single points of failure:
- Clients gain real-time visibility into asset security.
- Transactions require multiple signatories, ensuring greater protection.
- Trust becomes obsolete—blockchain-backed cryptographic proofs replace it.
This redefines the financial industry's standards. Much like Henry Ford's 'automobiles vs. faster horses’ analogy, most investors aren't yet aware of multisig's full potential. However, once they experience its transparency, security, and efficiency, traditional custodial models will become outdated relics.
Crypto Market's Search for Leadership
Expert Insights: By Andy Baehr, CFA
The crypto market mirrors broader societal uncertainties seen during events like NYC's election day. Despite hopeful narratives, the market struggles to find upward momentum due to:
- Stagnant legislative progress after government shutdowns.
- A lack of favorable Federal Reserve policies causing hesitation.
- Outperforming equities distracting investor interest.
Reflecting back on Election Day 2024, there were significant rallies post-election, but timing asset selection was difficult. Investors now seek a new narrative or leadership to inspire another rally. Will Bitcoin, ETH, or Solana rise to meet this demand?
Market Performance Post-Inauguration Day 2024
Among top-performing assets since Inauguration Day 2024, Ethereum (ETH) stood out as the leader:
- ETH surged due to stablecoin growth and tokenization narratives gaining institutional traction.
- Bitcoin (BTC) has carved its niche through ETFs and treasury adoption.
- Solana (SOL), despite expanding sponsorships and consumer adoption, lags behind expectations.
The market now waits for the next major narrative to spark a broad rally, with no clear leader in sight yet.
Divergence in ETH Price and DeFi Yields
Chart of the Week: ETH Price vs DeFi Yields and Funding Rates
Since August 2025, ETH prices have shown surprising growth, while:
- 7-day rolling DeFi pool APYs have declined (tracked by DeFiLlama).
- BTC/ETH funding rates have also trended lower.
This indicates the ETH rally may be driven by a Digital Asset Treasury narrative rather than fundamental demand for DeFi utility. Sustained weak yields could challenge further rally momentum if institutional flows slow down.
Upcoming Events & Additional Resources
Engage and Learn:
- Listen: CoinDesk covers Ripple Swell 2025 with insights from Citi’s Ryan Rugg on tokenized assets.
- Read: Nasdaq CEO Adena Friedman outlines how blockchain technology can modernize finance.
- Watch: David LaValle speaks on the top three crypto trends every advisor must know.
- Engage: Grayscale CoinDesk Crypto 5 ETF event in NYC at Flatiron Public Plaza on Nov. 7, featuring a pop-up hosted by Grayscale Investments and CoinDesk onsite from 10:30am-12pm ET.
For more, visit coindesk.com for updated crypto news and market trends.