Key Takeaways
- • Michael Novogratz, Galaxy Digital founder and former Goldman Sachs partner, predicts registered investment advisers (RIAs) will become the next major wave of bitcoin adopters, but only after infrastructure improvements are implemented to support custody and trading.
- • Fidelity has already enabled advisers on its platform to trade and hold bitcoin; TD Ameritrade was reportedly close to similar offerings before its November $26 billion acquisition by Charles Schwab, though neither firm has confirmed expansion plans post-merger.
- • Bitcoin trading at $9,300 as of January 29, 2020—down more than 50% from its 2017 peak—reflects lingering volatility that may be limiting RIA adoption despite institutional infrastructure improvements.
- • TD Ameritrade demonstrated early cryptocurrency institutional adoption by launching bitcoin futures trading on the Cboe exchange in December 2017, positioning it ahead of rivals like Charles Schwab, which has not yet permitted client cryptocurrency trading.
- • Novogratz argues bitcoin requires "Baby Boomers' money" through institutional channels to achieve its potential as "digital gold," signaling that wealth advisor adoption is critical to mainstream legitimacy and valuation inflection.
Summary
Michael Novogratz, the prominent cryptocurrency advocate and Galaxy Digital founder, outlined a critical thesis at the Context Summits conference in Miami Beach on January 29, 2020: registered investment advisers represent the next inflection point for bitcoin adoption among institutional investors. However, Novogratz emphasized that this transition requires more robust infrastructure to facilitate custody, trading, and regulatory compliance before RIAs can effectively integrate cryptocurrency into client portfolios.
The infrastructure foundation is partially in place. Fidelity, the Boston-based financial services behemoth, already permits investment advisers on its platform to trade and hold bitcoin directly. Novogratz indicated that TD Ameritrade had been positioned to announce similar capabilities before the November 2019 merger announcement with Charles Schwab. That $26 billion acquisition represented a significant consolidation in the competitive brokerage sector, where firms face intensifying pressure from fee compression and digitally native competitors targeting younger clients. TD Ameritrade representatives declined to comment on the timing or substance of potential cryptocurrency offerings, while Charles Schwab deferred the question to its acquisition target. Charles Schwab has not yet extended cryptocurrency trading access to its client base.
TD Ameritrade had previously demonstrated openness to cryptocurrency adoption. In December 2017, during peak bitcoin enthusiasm, the firm launched bitcoin futures trading on the Cboe exchange for institutional clients—an early institutional move by brokerage standards. The contrast with Charles Schwab's conservative posture on cryptocurrency underscores divergent institutional strategies heading into 2020.
The timing of Novogratz's remarks reflects subdued market conditions. Bitcoin traded at approximately $9,300 on January 29, representing a loss of more than 50% from its 2017 peak. Novogratz's emphasis on the need for "Baby Boomers' money" to flow into bitcoin suggests that institutional wealth advisor adoption is essential to legitimizing cryptocurrency as an asset class and moving valuations materially higher. Without RIA participation and distribution, bitcoin remains primarily a retail-driven and speculative asset rather than an institutionally sanctioned store of value.
The infrastructure foundation is partially in place. Fidelity, the Boston-based financial services behemoth, already permits investment advisers on its platform to trade and hold bitcoin directly. Novogratz indicated that TD Ameritrade had been positioned to announce similar capabilities before the November 2019 merger announcement with Charles Schwab. That $26 billion acquisition represented a significant consolidation in the competitive brokerage sector, where firms face intensifying pressure from fee compression and digitally native competitors targeting younger clients. TD Ameritrade representatives declined to comment on the timing or substance of potential cryptocurrency offerings, while Charles Schwab deferred the question to its acquisition target. Charles Schwab has not yet extended cryptocurrency trading access to its client base.
TD Ameritrade had previously demonstrated openness to cryptocurrency adoption. In December 2017, during peak bitcoin enthusiasm, the firm launched bitcoin futures trading on the Cboe exchange for institutional clients—an early institutional move by brokerage standards. The contrast with Charles Schwab's conservative posture on cryptocurrency underscores divergent institutional strategies heading into 2020.
The timing of Novogratz's remarks reflects subdued market conditions. Bitcoin traded at approximately $9,300 on January 29, representing a loss of more than 50% from its 2017 peak. Novogratz's emphasis on the need for "Baby Boomers' money" to flow into bitcoin suggests that institutional wealth advisor adoption is essential to legitimizing cryptocurrency as an asset class and moving valuations materially higher. Without RIA participation and distribution, bitcoin remains primarily a retail-driven and speculative asset rather than an institutionally sanctioned store of value.
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