Gemini Now a ‘One-stop Shop For Advisors’ After BITRIA Buy

key takeaways

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
This acquisition “will force everyone in the crypto community to wake up and follow suit,” according to Ric Edelman, founder of Edelman Financial Services

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’s technology with Gemini’s custody and exchange capabilities provides financial advisors with access to the entire crypto ecosystem and the ability to manage their clients’ portfolios from one interface.

A largely untapped market

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.

Charles Schwab estimated last year that there is about $20 trillion within advised accounts in the US, with roughly $17 trillion of that held at independent broker-dealers, regional broker-dealers, banks and wirehouses.

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

“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.”

Advisors currently have limited access to a handful of crypto assets through bitcoin futures ETFs and Grayscale Investments’ suite of products, including its Bitcoin Trust (GBTC), Abner explained. The US Securities and Exchange Commission (SEC) has not yet approved 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.”

Impact of the deal?

BITRIA’s Digital Asset Separately Managed Account (SMA) and Digital Turnkey Asset Management Platform (DTAMP) will be fully integrated into Gemini’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, partnered with Equity Trust Company in September to allow financial advisors and asset managers to bring digital assets to the retirement accounts they serve.

The partnership had built upon BITRIA’s existing relationship 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.

“The future of wealth management lies in digital assets and blockchain technology, and the integration of BITRIA’s technology with Gemini provides a bridge to that future,” Eyre said in a statement. “Gemini’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.

“Everyone wins, including the investors who are working with advisors who will be accessing Gemini’s new offering.”

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.”

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