Crypto exchange Gemini launches into wealth management with the acquisition of BITRIA

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David Abner, Global Business Development Manager at Gemini.

Source: David Abner

Gemini, the $ 7.1 billion crypto exchange, is embarking on wealth management with the acquisition of a digital asset platform for financial advisers, CNBC has exclusively learned.

The company has agreed to buy BITRIA, a five-year-old San Francisco-based startup whose tools help advisors manage bitcoin and other token holdings, according to Dave Abner, global business development manager at Gemini.

The move creates one of the industry’s first full-service digital asset custodians for advisers, according to Abner, who declined to disclose how much Gemini paid in the transaction. Gemini intends to combine its crypto custody and trading capabilities with BITRIA’s portfolio management programs, allowing advisers to do things like harvest tax losses, he said.

“The advisers currently manage the largest cash reserve in the country, and they hear from their clients who want access to crypto,” Abner said this week in a telephone interview. “This creates a unique, end-to-end experience for advisors to manage all of their clients’ digital assets within their traditional portfolio management systems. “

Crypto insiders predicted a merger boom this year as a cohort of newly flourishing digital asset giants like Gemini and Coinbase seek to acquire capacity and expand their offerings. Just yesterday, Coinbase announced it was buying Chicago-based FairX so it can offer derivatives to retail and institutional clients.

Although crypto started over a decade ago as a phenomenon driven by retail investors, the rise of bitcoin, ethereum, and other coins over the past two years has attracted more big investors in space. This created the need to find ways to provide high net worth investors with access to crypto through familiar wealth management vehicles such as separately managed accounts.

“No one else in the crypto space is looking to serve the wealth management community like Gemini is,” said Abner. “We are already the largest crypto ETF service provider in the world. Now we are entering the wealth space, and we are going to be the only full service provider of crypto assets” to the advisers.

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BITRIA, which changed its name from Blockchange in November, is one of a small handful of crypto companies that have sprung up to serve financial advisers. Competitors include Onramp Invest and Eaglebrook Advisors. Assets in the broader financial advisory industry have surged with booming stock markets, surpassing $ 110 trillion during the pandemic.

Gemini, founded in 2014 by Winklevoss twins Tyler and Cameron, was valued at $ 7.1 billion in a November funding round. The industry’s skyrocketing valuations have left companies with plentiful liquidity and mandates to accelerate their growth.

The acquisition follows a partnership between the two companies announced in 2020. BITRIA employees, including co-founder and CEO Daniel Eyre, are joining Gemini, the companies said.

“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.

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