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.”
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