Eaglebrook Advisors, which partners with more than 90 RIAs to provide Bitcoin and other crypto investments via separately managed accounts, expects to more than double its assets under management over the next year as historic crypto legislation was signed into law on Friday by president Donald Trump.
“We're very close to $400 million in assets, we're about $390 million right now, but our goal is to be at $1 billion over the next 12 months as we have a lot of big deals down the pipeline,” Eaglebrook CEO Chris King told InvestmentNews.
Eaglebrook, itself an SEC-registered investment adviser, was founded by King in 2019 and announced its partnership earlier this month to bring its crypto investing platform to Captrust, the RIA with over $1 trillion AUM. President Trump on Friday signed the GENIUS Act, which provides regulatory framework for stablecoins and is the country's first major national cryptocurrency legislation.
“The biggest objection that we had gotten over the past few years was that there's no regulations. So what this Crypto Week and all these bills are doing is giving advisors and wealth management firms the rules of the road, which will unlock access and allocations,” said King.
The GENIUS Act was one of three bills passed during the White House’s so-called Crypto Week, which coincided with Bitcoin trading at an all-time high of $123,000 on Monday, July 14. Congress has also passed the CLARITY Act that intends to delineate how the crypto market is regulated between either the SEC or CFTC, as well as The Anti-CBDC Surveillance State Act that blocks the Federal Reserve from issuing a central bank digital currency.
“Just knowing what the rules are and how [advisors] can integrate Bitcoin and digital assets into their practice is the most positive thing we've seen in this industry over the past five years, outside of the Bitcoin ETF and larger financial institutions putting their stamp of approval on the asset class,” said King.
Among the other RIAs and other wealth managers investing in cryptocurrency via Eaglebrook’s SMAs include Mariner Wealth Advisors, Halbert Hargrove, Dynasty Financial Partners, and Clearstead. Collectively, Eagblebrook’s partnered firms manage $1.7 trillion in client assets. Halbert Hargrove, the California-based RIA managing roughly $3 billion in AUM, began allocating to crypto in 2021 with most clients investing in the range of 1-5% of their portfolios.
“The framework of the CLARITY Act as far as what are we calling these assets - are they securities or are they commodities? I think that's going to help provide clarity on what exactly these assets are defined as from a regulatory standpoint, which is a step in the right direction,” Halbert Hargrove co-CIO Brian Spinelli told InvestmentNews.
Mariner, the private equity-backed mega-RIA with over $550 billion in assets, views “digital assets like Bitcoin and Ethereum not as passing fads but as innovative technologies reshaping the financial landscape.” Mariner invests in crypto through both ETFs and Eaglebrook’s SMAs.
“We’re leveraging the convenience and security of ETFs in retirement accounts and using separately managed accounts with qualified custodians for taxable accounts, which also allow for tax-loss harvesting,” Christina Lynn, director, wealth strategist at Mariner, wrote in an email to InvestmentNews. “Protecting clients is our top priority, so we steer clear of meme coins, unregulated platforms, and educate clients on how to avoid scams. Philosophically, we favor a long-term buy-and-hold strategy over speculative trading.”
In addition to Eaglebrook’s automated tax-loss harvesting, King touts the absence of tracking errors in crypto SMAs as an advantage over investing in crypto ETFs offered through BlackRock, Fidelity and various other firms. King says that Bitcoin accounts for 90% of Eaglebrook’s crypto allocation, with its RIA clients typically allocating three to five percent of liquid investable assets to crypto.
“With owning Bitcoin directly [via SMAs], there's no ETF tracking error or tracking difference. The ETF tracking difference for the Bitcoin ETFs can range anywhere from 50 bips all the way to 400 bips to the downside, depending on the day,” said King. “We've heard from clients investing over $50,000 in Bitcoin or Ethereum in a taxable account, we are the preferred way to allocate.”
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