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In the context of cryptocurrency, a "custodial" asset means an asset is placed under the care of a third party. This is similar to how banks have custody over their customer's funds. A Custodial Wallet refers to a wallet whose private key management falls under the care of a company. Examples of Custodial wallets include Coinbase, Nexo and other wallets where users do not have access to their private keys.
An exchange-traded fund (ETF) is a form of security that tracks a collection of securites such as stocks, bonds, index or cryptocurrency but tradeable like a single stock.
