Ben Strack

<div id="highlights-block_61e07025633d6" class="highlights">
 <ul>
 <li>Gemini’s global head of business development says company now provides the industry’s first full-service digital asset custodian for asset and wealth managers</li>
 <li>This acquisition “will force everyone in the crypto community to wake up and follow suit,” according to Ric Edelman, founder of Edelman Financial Services</li>
 </ul>
 
</div>



Gemini has acquired digital asset portfolio management platform BITRIA in a deal designed to allow more asset and wealth managers to meet clients’ rising demand for crypto.



Founded in 2014 by Cameron and Tyler Winklevoss, Gemini is a platform that allows customers to buy, sell, store and earn cryptocurrencies like bitcoin, ether and other DeFi tokens.



The firm last year launched Gemini Fund Solutions, the first unified platform providing fund managers with custody, clearing and trade execution specifically designed for crypto ETFs, closed-end funds and other fund vehicles.



Now, the integration of BITRIA&#8217;s technology with Gemini&#8217;s custody and exchange capabilities provides financial advisors with access to the entire crypto ecosystem and the ability to manage their clients&#8217; portfolios from one interface.



<h3 class="wp-block-heading">A largely untapped market</h3>



Dave Abner, Gemini’s global head of business development, noted that the company is one of the only firms in the crypto space focusing on advised assets — a piece of the institutional market that exceeds the size of the individual investor market.&nbsp;&nbsp;



Charles Schwab estimated last year that there is <a href="https://www.aboutschwab.com/no-one-is-staying-in-their-lane-and-thats-a-good-thing" target="_blank" rel="noreferrer noopener">about $20 trillion within advised accounts</a> in the US, with roughly $17 trillion of that held at independent broker-dealers, regional broker-dealers, banks and wirehouses.&nbsp;



“It’s a one-stop shop for advisors, and there’s no competitor in the marketplace right now,” he told Blockworks in an interview.



<blockquote class="wp-block-quote">“If you’re an advisor today, your clients are saying, ‘how do I get bitcoin or cryptocurrencies into my portfolio?’ and so you need to have a cryptocurrency strategy.”</blockquote>



Advisors currently have limited access to a handful of crypto assets through <a href="https://cms.blockworks.co/what-does-demand-for-bitcoin-futures-etfs-look-like-in-2022/" target="_blank" rel="noreferrer noopener">bitcoin futures ETFs</a> and Grayscale Investments’ suite of products, including its Bitcoin Trust (GBTC), Abner explained. The US Securities and Exchange Commission (SEC) <a href="https://cms.blockworks.co/when-will-the-sec-approve-a-spot-bitcoin-etf/" target="_blank" rel="noreferrer noopener">has not yet approved</a> an ETF that would invest in cryptocurrencies directly.



“If you think about how advisors add value to their investors, it’s by providing them thoughtful access, not just to the gateway [asset], bitcoin, but to the entire range of cryptocurrencies,” the head of business development said. “Investors want to get to DeFi, they want to get to meta companies…and this is really the only way for them to do that.”



<h3 class="wp-block-heading">Impact of the deal?</h3>



BITRIA&#8217;s Digital Asset Separately Managed Account (SMA) and Digital Turnkey Asset Management Platform (DTAMP) will be fully integrated into Gemini&#8217;s platform.



The integration will provide wealth managers with features such as SMA construction, portfolio rebalancing, tax loss harvesting, fee collection, account planning and data connectivity.



BITRIA, known as Blockchange before rebranding in November, <a href="https://cms.blockworks.co/blockchange-partners-with-equity-trust-to-bring-digital-assets-to-financial-advisors/" target="_blank" rel="noreferrer noopener">partnered with Equity Trust Company</a> in September to allow financial advisors and asset managers to bring digital assets to the retirement accounts they serve.&nbsp;&nbsp;



The partnership had built upon BITRIA’s <a href="https://www.prnewswire.com/news-releases/blockchange-and-gemini-partner-in-industry-first-to-bring-digital-assets-to-registered-investment-advisors-301113450.html" target="_blank" rel="noreferrer noopener">existing relationship</a> with Gemini Trust Company, which facilitates custody of digital assets for its platform users.



Daniel Eyre, Co-Founder and CEO, BITRIA, told Blockworks in September that he believes a vast majority of assets will be tokenized in the next five to 10 years, and advisors will need the tools to access those tokenized assets in a compliant and packaged way.&nbsp;



&#8220;The future of wealth management lies in digital assets and blockchain technology, and the integration of BITRIA&#8217;s technology with Gemini provides a bridge to that future,” Eyre said in a statement. “Gemini&#8217;s leading crypto-native custodian capabilities provide an incredible platform for our existing and future customers to innovate at the speed of the crypto ecosystem.”



Ric Edelman, founder of Edelman Financial Engines, called the acquisition a significant one, noting that it shows that Gemini realizes the importance of providing services to financial advisors.



“Dan Eyre is an excellent executive in this field, and he’ll be very helpful to Gemini, and Gemini offers scale that will accelerate BITRIA’s ability to gather accounts and AUM,” he told Blockworks.



<blockquote class="wp-block-quote">“Everyone wins, including the investors who are working with advisors who will be accessing Gemini’s new offering.”</blockquote>



Registered investment advisors (RIAs) alone control about $8 trillion in investor assets, Edelman said, adding that companies wanting to quickly grow assets under management cannot ignore the RIA and broker-dealer marketplace.



“And yet, most in the crypto community still make that mistake,” he explained. “Gemini’s acquisition of BITRIA will force everyone in the crypto community to wake up and follow suit.”



<hr class="wp-block-separator">
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Gemini Now a ‘One-stop Shop For Advisors’ After BITRIA Buy

<div id="highlights-block_614cd2425e335" class="highlights">
 <ul>
 <li>Blockchange CEO said he expects a vast majority of assets will be tokenized in the next five to 10 years</li>
 <li>Latest alliance builds upon Blockchange’s relationship with Gemini Trust Company</li>
 </ul>
 
</div>



Blockchange has partnered with Equity Trust Company to allow financial advisors and asset managers to bring digital assets to the retirement accounts they serve. 



The San Francisco-based company’s platform, BITRIA, enables asset managers, registered investment advisors (RIAs) and financial advisors to offer 40 different digital assets to their clients as another form of professionally managed investments. Equity Trust is one of the largest alternative asset custody providers for retirement accounts.



The latest partnership builds upon Blockchange’s relationship with Gemini Trust Company, which facilitates custody of digital assets for its platform users, as Equity Trust will allow Blockchange customers account custody services for digital assets in tax-advantaged IRAs.



“IRAs comprise a large portion of RIAs&#8217; AUM, so the Equity Trust integration with Blockchange paves the way for more investors to enjoy the benefits of the crypto marketplace,” Dave Abner, Gemini’s global head of business development, said in a statement.



Blockchange CEO Dan Eyre said that one thing traditional finance does well is customer service, an attribute he noted is currently lacking in the digital assets space.



<blockquote class="wp-block-quote">“When you look at how the market is evolving, there hasn’t been a lot of interest yet in advisors, fiduciaries, asset managers … because they’re almost the highest regulated industry out of all of them,” he told Blockworks in an interview. “When they go into an endeavor like this … they’re expecting certain things to be in place, and if those things aren’t in place it feels very risky for the organization.”</blockquote>



The alliance with Equity Trust allows for transfers to happen in less than a week compared to wait times to get invested of 30 to 45 days with other IRA custodians in the space, Eyre said.



Equity Trust&#8217;s integration with BITRIA provides IRA holders with incoming funds transfers through Automated Customer Account Transfer Service (ACATS) in less than a week. This compares to wait times of 30 to 45 days with other IRA custodians in the space, Eyre said, adding that moving as fast as possible is critical in a volatile asset class.



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="370" height="260" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Dan-Eyre-copy-pdjtowwmveb7cynz698ng5n783sap6lm3b47bsouy0-1.jpeg" alt="Dan Eyre, Blockchange" class="wp-image-8502" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Dan-Eyre-copy-pdjtowwmveb7cynz698ng5n783sap6lm3b47bsouy0-1.jpeg?w=370 370w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Dan-Eyre-copy-pdjtowwmveb7cynz698ng5n783sap6lm3b47bsouy0-1.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Dan-Eyre-copy-pdjtowwmveb7cynz698ng5n783sap6lm3b47bsouy0-1.jpeg?w=366 366w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Dan-Eyre-copy-pdjtowwmveb7cynz698ng5n783sap6lm3b47bsouy0-1.jpeg?w=312 312w, https://blockworks-co.imgix.net/wp-content/uploads/2021/09/Dan-Eyre-copy-pdjtowwmveb7cynz698ng5n783sap6lm3b47bsouy0-1.jpeg?w=80 80w" sizes="(max-width: 370px) 100vw, 370px" /><figcaption>Dan Eyre, CEO, Blockchange</figcaption></figure></div>



&#8220;As the demand for cryptocurrency and other digital assets continues to surge, it&#8217;s advantageous for advisors to be prepared with a solution for clients who want to diversify into this asset class,” Equity Trust CEO George Sullivan said in a statement.



Matthew Hougan, chief investment officer of Bitwise Asset Management, <a href="https://cms.blockworks.co/qa-why-bitwise-believes-indexing-is-a-superior-crypto-strategy/" target="_blank" rel="noreferrer noopener">previously told Blockworks</a> that the financial advisor and RIA market is the next big market to move into crypto, but that they require a lot of education and support to navigate the asset class. He noted at the time that he believes the crypto industry has been a bit overfocused on the institutional market.



Eyre said he believes that a vast majority of assets will be tokenized in the next five to 10 years, and advisors will need the tools to access those tokenized assets in a compliant and packaged way.



“We want to create that layer that advisors use to engage with the tokenized economy,” he added. “We have all of those in place today for crypto and digital assets as we know them now, but that’s just the tip of the spear for the coming wave of tokenized assets that we see advisors and their clients having great demand for.”



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