Institutional Crypto

Separately managed accounts (SMA) in Crypto

Wealth managers are increasingly receiving client questions about investing in crypto and how clients can gain exposure to this asset class. Most financial advisers are unaware of the pros and cons of investment vehicles available to invest in digital assets on behalf of their clients.Over the past 12 months, 90% of financial advisers have received client questions about crypto, according to Bitwise. RIAs and financial advisers must navigate a range of considerations when allocating to digital assets, most notably around security and compliance.

Separately Managed Accounts (SMAs) have experienced significant growth over the past decade, with assets under management increasing from $550 billion in 2011 to $1.7 trillion in 2021. Wealth managers are increasingly opting for SMAs due to their key benefits such as tax optimization, direct ownership, professional management, and customization. These advantages have made SMAs the preferred method for investing in emerging asset classes like cryptocurrencies.

Direct Ownership

Offering direct ownership of assets, Crypto SMAs minimize tracking errors and provide 24/7 liquidity, outperforming other vehicles like OTC trusts that may face pricing discrepancies.

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Institutional Custody

By leveraging institutional-grade custodians, Crypto SMAs ensure the highest standards of security and regulatory compliance for digital assets, offering peace of mind and professional oversight on par with traditional equities.

Reporting Integration

Crypto SMAs seamlessly integrate with existing wealth management platforms, enabling straightforward modeling, reporting, and billing for digital asset investments, enhancing efficiency and transparency.

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Professional Management

Crypto SMAs can offer access to expert management, ensuring investors navigate the complexities of this emerging asset class with informed, strategic decisions.

Tax Optimization

Crypto SMAs unlock tailored tax strategies due to the volatile crypto market, allowing investors to directly own assets and potentially reduce capital gains tax, a feature not available in OTC trusts or private funds.

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