Adding a High-Quality Wealth Management Approach to Digital Assets

Digital assets and cryptocurrencies are getting a “white glove” treatment in wealth management, catering to high net worth and ultra-high net worth individuals. Guardian Bitcoin, a US-based firm specializing in managing multi-signature wallets, is at the forefront of this trend. While previously the US lagged behind other jurisdictions in cryptocurrency regulation, recent changes have created a more favorable environment for digital assets.

One significant change was the Securities and Exchange Commission’s decision to scrap a rule requiring companies providing custody of crypto assets to treat them as balance sheet liabilities. This rule had hindered market growth, with banks and financial institutions hesitant to get involved. However, the tide has turned, with over 200 publicly traded companies now including bitcoin on their balance sheets, a significant increase from previous years.

FASB accounting rules have been updated to allow fair value accounting of bitcoin, enhancing financial reporting and treasury management. The rapid growth of BlackRock’s spot bitcoin exchange-traded fund, surpassing $70 billion in assets under management and heading towards $100 billion by the year’s end, highlights the increasing institutional acceptance of cryptocurrencies.

Corporate treasuries are also allocating significant amounts to bitcoin, with notable examples like MicroStrategy Incorporated adopting bitcoin as its primary treasury reserve. Companies like Metaplanet, Strive, and even Tesla have followed suit, signaling a broader trend of institutional adoption.

Guardian Bitcoin fills a crucial niche by offering services tailored to individual, family, and business accounts. Its multi-signature wallet management approach minimizes risks associated with single-signature wallets and places a strong emphasis on estate planning. The firm’s reporting feature provides clients with essential information about wallet health, recent transfers, and key data, focusing primarily on bitcoin custody for ultra-high net worth and family office clients.

Guardian Bitcoin’s commitment to educating clients is evident in its upcoming forum for family offices. Leaders from RIAs overseeing multiple family offices will discuss the significance of bitcoin for these organizations. Co-founder Scott Dunn emphasizes the importance of simplifying bitcoin concepts for clients, highlighting the need for inheritance planning in self-custodied assets.

Regulatory changes and increasing awareness of the wealth management potential of bitcoin are driving adoption in the US. States like New Hampshire, Arizona, and Texas have taken steps to establish strategic bitcoin reserves, promoting local adoption efforts. Regulatory and macroeconomic factors are aligning to support bitcoin’s growth towards $1 million by 2030, with RIAs and family offices expected to allocate larger portions of their portfolios to digital assets.

Despite these positive trends, sentiment within the wider wealth industry remains mixed. Citi Wealth’s Global Family Office report underlines the cautious stance many family offices have towards digital assets. While regulations and valuations are improving, digital assets are not a priority for most family offices globally. However, as awareness grows and regulatory clarity increases, digital assets like bitcoin are poised for greater institutional adoption in the coming years.