U.Southward. Depository financial institution, the 5th-largest retail banking concern in the Us, announced Tuesday that it is launching a cryptocurrency custody service for institutional investors, potentially setting the stage for wider mainstream acceptance of digital assets.

As CNBC reported, U.S. Bank has partnered with New York Digital Investment Grouping, or NYDIG, to provide custody services for Bitcoin (BTC), Bitcoin Greenbacks (BCH) and Litecoin (LTC). Gunjan Kedia, a senior executive at U.S. Bank'due south wealth management and investment division, told CNBC that support for other cryptocurrencies like Ether (ETH) volition exist rolled out over time.

Fund managers and other institutional investors accept been increasing their exposure to cryptocurrencies for most of the year. Their participation has grown significantly since the May 2022 Bitcoin halving event, which triggered renewed bullish sentiment for the leading digital nugget and, past extension, the broader cryptocurrency market.

Grayscale Bitcoin Trust, which trades under the ticker symbol GBTC, has become a popular vehicle for institutional investors. As Cointelegraph reported, U.S. investment bank Morgan Stanley has doubled its GBTC holdings since April. The bank also added BTC exposure to 12 investment funds in Apr 2022.

Related: The long game: Institutional interest in crypto is just getting started

U.Due south. Bank isn't the first major financial institution to offer crypto custody services; major players such as State Street, Bank of New York Mellon and Northern Trust have also announced plans to custody cryptocurrencies.

Institutions are likely to express greater interest in cryptocurrencies as the asset grade continues to grow and mature. On Tuesday, the cryptocurrency market reached a total capitalization of nearly $2.3 trillion, with Bitcoin fighting to repossess $l,000.