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iCapital Network CEO Lawrence Calcano
iCapital Network CEO Lawrence Calcano

iCapital and Grayscale Partner On Crypto Access

iCapital Network and Grayscale Investments are working together to provide advisors with a new way to invest in assets like Bitcoin, Ethereum and Cardano.

Alternatives platform iCapital Network is providing advisors access to digital asset investing via a new partnership with digital currency asset manager Grayscale Investments, according to an announcement. As part of the agreement, more than 6,700 advisors working with high-net-worth clients will have access to Grayscale’s market-cap weighted “Digital Large Cap Fund” (GDLC), which holds six different digital assets. 

iCapital Network will be providing advisors with the investment administration and education they need to invest in digital assets, according to the announcement. Grayscale will be providing the strategy, via its Digital Large Cap Fund, which is primarily invested in Bitcoin and Ethereum, with Cardano, Bitcoin Cash, Chainlink and Litecoin rounding out its holdings. The fund has $507 million in assets under management.

“The wealth management industry is recognizing the diversification benefits and inflation hedge potential that digital currencies can offer in an investment portfolio,” said Hugh Ross, COO of Grayscale, in a statement. His firm is stepping up to provide an “institutional-quality, digital currency investment strategy” for advisors, a group in need of a simple, accessible digital asset investing strategy, he added. 

Citing a survey it conducted with InvestmentNews, more than half (61%) of advisors have been asked about cryptocurrencies by clients and 79% of those advisors plan to increase recommendations of cryptocurrency investments over the next year—if their firms agree with those recommendations.

End clients aren't the only people clamoring for digital assets. Findings from a Fidelity Digital Assets survey announced Monday indicated that more than half (53%) of surveyed investors expect a "digital dollar" to arrive in the next five years and the majority (84%) of U.S. and European institutional investors are interested in purchasing institutional investment products that hold digital assets. In the U.S., well over half (79%) of family offices surveyed had a neutral-to-positive view of digital assets.

The iCapital-Grayscale partnership makes sense, according to some influential advisor industry observers. “This is another illustration of the mainstreaming of digital assets within the financial services industry,” said Ric Edelman, founder of the Digital Assets Council of Financial Professionals. “Advisors who remain ignorant about this technology will lose clients and AUM—and place into question their ability to fulfill their fiduciary duty.” 

Advisors should expect more services and products to come online for advisors wanting to provide access to digital assets, he added, which will make digital assets all the more valuable.

iCapital Network recently launched an “Alternatives Exchange” with UBS and Envestnet and hit a $4 billion valuation after a $440 million funding round announced in July. Grayscale has been pushing to convert its $25 billion Bitcoin Trust (GBTC) into an ETF, having recently hired David LaValle to lead the effort. LaValle is the former head of custom index provider Alerian.

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