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Ritholtz, WisdomTree Launch Crypto Index Aimed at Advisors

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What You Need to Know

  • The new index was designed to provide retail investors, via a financial advisor, access and diversified exposure to cryptoassets.
  • Onramp is supplying the SMA architecture, rebalancing technology and customer support for advisors to invest in the index on behalf of clients.
  • Gemini is serving as the trading platform and custodian.

Ritholtz Wealth Management and WisdomTree provided another ringing endorsement for cryptocurrency on Friday as they teamed up to launch the RWM WisdomTree Crypto Index, which they are promoting as the first index-based crypto separately managed account.

The new index was “designed to provide retail investors, via a financial advisor, access and diversified exposure to cryptoassets,” the companies said in a joint announcement with Onramp Invest and Gemini.

The index has been licensed to Onramp, an integration platform that provides access to cryptoassets for RIAs and is supplying the SMA architecture, rebalancing technology, and customer support for advisors to seamlessly invest in the index on behalf of their clients. Gemini is serving as the trading platform and custodian.

At launch, the RWM WisdomTree Crypto Index is made up of 36% Bitcoin, 20% Ethereum and 4% each of 11 other cryptoassets that provide exposure to the broader crypto ecosystem, spanning layer-1 networks (payment systems and smart contract platforms), layer-2 protocols, oracle networks, crypto indexing services, decentralized finance and the metaverse, the companies said.

Company stocks included in the index are intended to represent thematic investments in diverse segments that the companies said advance crypto infrastructure and provide necessary services.

WisdomTree, which now has about $76.4 billion in AUM globally, is “incredibly bullish on digital assets transforming financial services,” according to Jeremy Schwartz, its global chief investment officer. The company has “hired aggressively to build indexing infrastructure and support for a crypto-focused investment strategy,” he said in a statement.

WisdomTree views this direct indexing implementation of the RWM WisdomTree Crypto Index via Onramp and Gemini as “the best-assembled structure and diversified cryptoasset exposure currently available to U.S. investors and particularly the RIA community,” he added.

The index will follow a modified market-capitalization-weighted approach and allow the weights to fluctuate in line with market movements. As new cryptoassets become eligible for trading, custody and meet the standards of the index, and the market evolves, the Index Committee will review index exposures regularly, according to the companies.

RWM executives including CEO Josh Brown, Chief Investment Officer Barry Ritholtz and Director of Research Michael Batnick are all personally invested in the index, along with “several other” of the firm’s financial advisors and employees, according to the firm.

“The moment of mass adoption for digital assets, blockchain, DeFi, metaverse and web3 technology has arrived,” Batnick said in a statement. “As wealth managers, we have a responsibility to adapt our portfolios to this burgeoning opportunity. As fiduciaries, we have an obligation to do so in a sensible way while harnessing the benefits of increased diversification.”

Enabling investors to access digital assets by tracking an index strategy represents a good opportunity for RWM to “have an even broader impact,” Batnick added.

RWM is also an investor in Onramp, which said in August it raised $6 million in seed fundraising, with major contributions from RWM, WisdomTree, Coinbase Ventures, Eterna Capital, Fox Ventures, Galaxy Digital, Galaxy Fund Management and Gemini Frontier Fund.

Earlier this year, WisdomTree also introduced the WisdomTree +Crypto Model Portfolios that it said would be made available for advisors to view as an educational resource, including via Onramp, with integration into Gemini’s crypto platform.

Onramp Invest CEO Tyrone Ross told ThinkAdvisor in April that Onramp would be providing content with WisdomTree for advisors and that it was also “having discussions with WisdomTree now to build out some model portfolios for financial advisors with some really cool allocations with Bitcoin and Ether,” the native cryptocurrency of the Ethereum open-source blockchain.

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