The great crypto meltdown of 2022 saw major retail digital asset lenders such as Celsius, Voyager, and BlockFi collapsing, costing investors billions. Amid the chaos, Abra, a Silicon Valley investment platform that managed over $1 billion in assets, survived and is now repositioning itself as an institutionally-focused investment firm. Abra closed its U.S. retail business last summer as regulators began scrutinizing interest-bearing accounts of crypto companies, which they deemed as unregistered securities offerings. The firm settled claims of securities fraud and misleading statements with several states earlier this year, ensuring investors have been getting their money back.
Abra has revamped its platform to target private clients, family offices, and hedge funds, as well as other institutional investors. The Securities and Exchange Commission has approved its subsidiary Abra Capital Management to operate as a registered investment advisor. With close to $450 million in assets, the firm offers a range of services including spot and options OTC trading, borrowing, lending, staking, yield, and asset management. Abra now uses the separately managed accounts model, allowing clients to retain ownership over their assets and independently verify them on-chain, minimizing counterparty risks.
Despite the popularity of investing in crypto stocks and ETFs, Barhydt is confident in Abra’s competitive edge, catering to clients who seek to earn a reasonable yield on their bitcoin and ether while being able to borrow against their assets in a compliant manner. Unlike ETFs, SMAs offer investors greater control over tax consequences. Abra is not the only firm embracing SMAs, with Eaglebrook Advisors and Coinbase also offering digital asset SMA strategies. Anchorage Digital, a federally chartered crypto bank, has launched its SMA offering to cater to the growing demand for these services.
Abra has successfully reengaged old customers and onboarded new clients, with 200 institutions and 200,000 retail clients outside the U.S. currently using the platform. The minimum investment for a separately managed account with Abra is $100,000, with advisory fees ranging between 1 and 2% depending on the type of investment products used. Barhydt believes that Abra has an advantage in the market, having survived the meltdown and now strengthening their position in the industry. The firm’s focus on institutional investors and its compliant, ethical approach to lending and asset management are positioning it as a key player in the evolving crypto landscape.
