Gemini Trust Co., a cryptocurrency exchange for retail investors, is moving further into wealth management with the acquisition of a digital asset platform for financial advisers.
The $7.1 billion exchange has agreed to purchase Bitria, a 5-year-old startup based in San Francisco that provides advisers with tools to access and manage holdings of Bitcoin and other tokens.
The web-based application gives an adviser discretionary management over digital assets including Bitcoin, Ethereum, Bitcoin Cash and Litecoin, among others, purchased through a custodian and exchange.
“Clients want access to the wider range of crypto, and Bitcoin ETFs that are available now — or could be coming in the future — are just very, very narrow,” said Dave Abner, Gemini’s global head of business development. “Bitcoin is just the gateway.”
Advisers can onboard their clients directly onto the platform and adopt either a model-based approach, where portfolio changes are made to all accounts at once, or a client-by-client basis. Alternatively, an adviser can use the platform via a separately managed account structure.
“Advisers have the ability to tailor portfolios and add breadth and depth to build portfolios for particular clients,” Abner said.
Gemini offers more than 70 cryptocurrencies on its platform.
According to the latest U.S. Future Flows report by InvestmentNews Research, about a third of all advisers surveyed expect to increase their clients’ exposure to digital assets in the coming years. A similar report from IN early in 2021 found that while only 10% of advisers were currently using crypto, 44% believed they would be using it within five years.
With approximately $20 trillion in assets under management already in advised accounts in the U.S., demand for crypto could potentially funnel billions of dollars into digital assets in the coming years, according to data provided by Gemini.
“Investors are moving money off of advisory platforms to go and buy crypto on exchanges,” Abner said. “It’s very clear that money is moving, and working with a platform means advisers can better help their clients.”
Gemini initially announced a partnership with Bitria in August 2020.
“The future of wealth management lies in digital assets and blockchain technology,” Bitria founder and CEO Daniel Eyre said in a statement, adding that the Gemini acquisition creates a “bridge to that future.”
Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.
From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.
"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.
Chair also praised the passage of stablecoin legislation this week.
Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.
Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.
Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.