Welcome back to Digital Wealth, the weekly news aggregator for digital investing, asset management, and wealthtech.
Today we highlight the following, focusing on the trend of crypto infrastructure adoption across wealth management, which has become undeniable:
NORTH AMERICA:Gemini Brings Crypto To More Than 3,000 RIAs Managing $1.3T+
NORTH AMERICA: Step Secures An Additional $300MM To Accelerate Growth, Launches Crypto Investing And A National Financial Literacy Curriculum, & Largest Independent Digital Investment Advisor Debuts Crypto Investing by Betterment with Four Diversified Crypto Portfolios
ASIA PACIFIC: Citi, Accel Invest In Digital Asset Manager Started By Former HSBC, Meta Executives
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Various financial companies have been forging alliances to bring financial advisors and their clients exposure to investments in crypto and the broader digital asset class. Just to name a few — Ark Invest, Franklin Templeton,Fidelity, and Gemini. Further, Gemini has just announced that it acquired wealth management platform BITRIA, which will be integrated with Envestnet’s Tamarac platform.
That’s a big footprint, with access to a client base of more than 3,100 independent RIAs managing over $1.3 trillion in assets. Financial advisors using Envestnet | Tamarac will have access the Gemini BITRIA platform, and view client crypto accounts in the Tamarac dashboard, with a unified view of portfolios across all asset classes.
BITRIA already offers SMA construction, account planning, and portfolio rebalancing, and will will eventually be integrated with the reporting capabilities that Envestnet | Tamarac, including the client portal, analytics and benchmarking, goal-based investment planning, and holistic net worth reporting.
In the short term, advisers may find the crypto asset class challenged given the market; but that will likely change over time. For Gemini, getting broad client adoption will be challenging for some of the same reasons, but the RIA market is the right direction. That said, the company may need to revise its fee structure in order to be competitive with mass affluent clients and their fiduciaries.
Citi is investing in a digital asset manager, co-leading a $6MM seed funding round in Hong-Kong based Xalts with backers like Polygon Co-founder Sandeep Nailwal, Silicon-Valley based Accel, and Mumbai-based investment firm AlphaGrep. Founded this year by a former trader at HSBC and Meta Asia executive, Xalts’ origin story is still in its infancy.
The company is yet to officially launch its suite of financial products, but are marketing ETPs (e.g., a Crypto Bluechip Index to be rebalanced monthly), Mutual Funds (e.g., a quant-based strategy using macro signals to maximize return for a particular level of volatility), as well as capital markets services like treasury management, tokenization, and digital asset repos. We think it is notable to see such an institutional approach in this geography.
Last week we mentioned that Asia has been seeing some of the highest rates of digital asset adoption, specifically with participation among traditional asset managers and digital asset companies through partnerships or acquisitions. There is a lot of competition in this space, and Xalts still has a long road ahead to deliver at scale.
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