What is Custodial?
An arrangement where a third party holds the keys and you hold a claim against them.
Exchange balances, most yield products and every exchange-traded Bitcoin vehicle are custodial. What you own is a legal claim, not coins on a chain you control.
That claim may be perfectly good. It is simply a different kind of asset, with counterparty risk, and it should be priced and understood as one.
Related terms
Not your keys, not your coins
The maxim that coins held by a third party are that party's coins and your claim against them.
Keys & custodySelf-custody
Holding your own private keys rather than trusting a third party to hold coins for you.
MarketsSpot Bitcoin ETF
An exchange-traded fund holding bitcoin directly, giving regulated exposure without the holder ever touching…
This definition is part of the Bitcoin Logical glossary. For the fuller explanation, start with Learn, or see the live numbers on The Bitcoin Signal.