New block trading offering seeks to boost RIA crypto access

Anchorage Digital Bank is set to facilitate crypto block trades for registered investment advisers (RIAs) as part of its bid to boost access for financial pros looking to enter the segment.

The offering comes via a link-up with Onramp Invest — a digital asset wealth platform working with US RIAs with combined assets under management of $40 billion. It follows Anchorage introducing custody and settlement services for RIAs in November.

Anchorage Digital became a bank chartered by the Office of the Comptroller of the Currency (OCC) in January 2021.

The firm’s CEO, Nathan McCauley, said Anchorage wants to be a “regulatory solve” for RIAs with mandates to hold crypto assets with a qualified custodian.

“We’ve been able to do that with a national bank charter,” McCauley told Blockworks. “But then there’s a bunch of specific things about how we can get good execution for clients and solve some of the other problems, and one of those things is block trading.”

Block trades are large securities transactions privately negotiated away from public markets to minimize the trade’s impact on the security’s price.

Onramp Invest CEO Eric Ervin said in a statement that block trading lets RIAs execute multiple trades across their entire book of clients as a single institutional order — a process he added maximizes efficiency and minimizes cost.

An RIA market eyeing crypto

Various industry watchers have labeled RIAs as a wealth management channel that is still relatively untapped when it comes to crypto adoption.

A survey published earlier this month by Bitwise and VettaFi found about 80% of financial advisers said they were either unable to buy crypto for clients, or unsure whether they could.

98% of advisers with an existing allocation to crypto in client accounts plan to either maintain or increase that exposure in 2024, the survey found. Crypto equity ETFs were respondents’ top choice when asked what type of crypto investments they were most interested in allocating to this year.

Nearly 90% of respondents interested in buying BTC were waiting for the Securities and Exchange Commission to approve a spot bitcoin ETF. Such funds began trading on Jan. 11.

While an ETF will be an appropriate wrapper for many RIAs, others will likely want to get direct access to crypto assets.

The block trade feature would be for directly trading crypto assets such as BTC and ether, McCauley noted.

“I think in the same way that RIAs support stocks and ETFs that are a combination of those stocks, they will want to support spot crypto and the ETFs that are wrappers around the crypto,” McCauley said.

The SEC’s long-awaited approval of spot bitcoin ETFs is the latest in a string of “regulatory and institutional unlocks for the digital asset ecosystem,” the Anchorage CEO added.

While such a trend has spurred more interest among RIAs in adopting crypto investments, he noted an “integration barrier” for such professionals continues to exist.

“Right now it’s a decent-sized integration to get [crypto investments] going,” McCauley said. “Over time it’ll be kind of a point-and-click opt-in that will feel very similar to opting in to any other kind of asset.”

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