Bank of America (BAC), in a Thursday note, said that the crypto ecosystem continues to grow despite the market corrections and bankruptcy experienced last year. This follows a report stating that exchange operator Nasdaq plans to launch a custody service for digital assets by the end of the current quarter.

The report stated that institutional demand is driving the offer of institutional-grade product, and Nasdaq is just the latest TradFi firm to expand its services in the digital asset space.

Bank of America said institutional investors are still engaged and focused on “the disruptive nature of blockchain technology in the long term.”

The bank expects the collapse of crypto companies to slow down institutional trading, as it “reevaluates counterparty risk” and ensures that custody and exchange are separate entities.

Analysts Alkesh Moss and Andrew Moss noted that these collapses created a void within the crypto ecosystem, which “trusted and experience TradFi companies offering institutional-grade product may fill.”

The U.S. Securities and Exchange Commission (SEC) enhanced safeguarding rules may limit the ability for registered investment advisers in the U.S. to provide custody of clients’ tokens at most crypto-native trading platforms, further driving TradFi institutions towards the space.

The bank stated that TradFi institutions remained the preferred counterparty.

Read more: Tokenization of Real World Assets is a Key Driver of Digital Asset adoption: Bank of America

Sheldon Reback is the editor.