Grayscale Investments has partnered with iCapital Network to provide more than 6,700 advisors with access to its cryptocurrency investment products.
New digital currency investment strategies
This important partnership, announced by the two companies jointly on Monday, brings together iCapital’s trusted education, technology and investment administration capabilities and Grayscale’s expertise and leadership in digital currency. iCapital’s advisors and clients will thus have access to Grayscale’s leading digital currency investment strategies.
The partnership, according to the management of the two companies, would lay the foundation for a future financial advisory giant in the crypto sector, which according to the CEO of iCapital Partners, is an asset that more and more clients are approaching.
“Advisors and their clients have expressed increasing appetite for uncorrelated return potential in their portfolios, and digital currencies are at the center of the conversation right now”, said Lawrence Calcano, president and CEO of iCapital Network.
“We are delighted to partner with Grayscale, a recognized leader in digital currency investing with the experience to help investors navigate this dynamic asset class”.
Hugh Ross, Chief Operating Officer of Grayscale, said:
“We are thrilled to collaborate with iCapital to provide access to an institutional-quality, digital currency investment strategy that is differentiated by its transparency as an SEC reporting company. In a world with trillions of dollars of fiscal stimulus and negative real interest rates, the wealth management industry is recognizing the diversification benefits and inflation hedge potential that digital currencies can offer in an investment portfolio”.
Financial advisors show great interest in crypto investments
This deal seeks to track the new needs of large investors, as reflected in a November 2020 survey of 500 large US financial advisors by Grayscale Investments and Investment News Financial Advisors.
According to the survey results, about 10% of advisors said they already currently recommend cryptocurrencies to their clients: 61% think they will do so within the next two years, 67% think they will do so as soon as this is permitted by the company they work for, and 79% of those already advising on digital assets said they will increase their recommendations on digital currencies next year.
Analysis of the methodologies used by advisors already recommending cryptocurrency investments to their clients is also interesting.
Before recommending cryptocurrencies, 68% of advisors require their clients to have a high-risk appetite. More than half (53%) also require them to have sophisticated investment knowledge, 36% require them to have substantial assets and 36% implement a policy whereby clients take the first step by broaching the subject. The majority also suggests investing in a cryptocurrency fund (56%) rather than buying individual coins (44%).
Grayscale and iCapital Partners: new technologies at the service of investors
Founded in 2013 by the Digital Currency Group, Grayscale Investments is the world’s largest digital currency asset manager, with $43 billion in assets under management as of 9 September 2021. Through its family of investment products, Grayscale offers a range of financial vehicles that invest in cryptocurrencies.
Through Grayscale, it is possible to invest in the world’s largest cryptocurrencies, but without becoming a physical holder of the asset. The value of the shares ends up reflecting that of the digital assets net of fees and commissions.
iCapital Partners, also founded in 2013 in New York, is the leading global financial technology company that has revolutionized the world of financial advice with new technological methodologies.
Asset managers and banks are leveraging iCapital’s technology to simplify and scale their private investment operating infrastructure.
Nearly 100 financial firms use iCapital’s technology services including Blackstone, Goldman Sachs, J.P. Morgan, KKR, Morgan Stanley CitiGroup, and UBS. In 2020, iCapital closed a $162 million capital raise with strategic investors including BlackRock, Goldman Sachs, Ping An, and Wells Fargo.