Jake Claver, CEO of Digital Ascension Group, a company that helps wealthy individuals and their families navigate the world of cryptocurrencies, recalls how one of his clients, a “gentleman from Dallas,” turned $11,000 into nearly $500 million, mostly by trading memecoins (culturally themed cryptographic tokens with no real utility that can fluctuate wildly in valuation).
This lucky investor, who Claver first met as a friend, was managing his own cryptocurrencies. “He made millions of dollars trading meme coins using sniper bots (automated software that buys and sells newly listed tokens in milliseconds according to specific parameters),” Claver said.
Ultimately, Claver persuaded a friend to attend one of his registered investment advisor (RIA) family office events, which resulted in a portion of the trader's portfolio being incorporated into the Ripple network's established native token, XRP. “We saw 6x on XRP, so he did pretty well,” Claver said.
A few years ago, Clubber found himself looking for advice on managing his own crypto profits. Specifically, we wanted to explore the best way to build crypto assets, handle taxes, conduct succession planning, and more.
However, none of the typical asset advice found in the traditional high net worth (HNW) space seemed to be available to crypto holders. After several helpful introductions, Claver consulted with several family offices and noticed a clear advisory gap in the market. This led to the creation of Digital Ascension, which got off to a flying start and now manages about $1 billion in crypto assets for wealthy families.
“Ascension began taking equity stakes in October of last year and partnered with Anchorage to manage the facility,” Claver said in an interview. “So we went from zero to 1 billion in all cryptocurrencies in about a year. We work with 10 families and have about 1,500 additional clients with total portfolio values between 500,000 and 5 million. And we can confidently say that we are the largest RIA in the world when it comes to cryptocurrencies.”
“A totally different kind” of asset management
Ascension uses every conceivable private client service and does it for cryptocurrencies as well, Claver explained. This includes everything a family office provides, including estate planning, taxes, accounting, bill payments, and more. This is in parallel with asset management, such as allocating to different cryptocurrencies, setting up lines of credit, and earning returns on assets, but all of this is done in a strict and regulated manner and “not through DeFi (decentralized finance),” Claver said.
“We do that with institutional custody and insurance on the assets, including tripartite agreements to reduce the risk of loss,” he said. “This is very different from what’s on-chain. You can take advantage of additional services and get all the extra assurances you get from an institution.”
The key element here is custody, thanks to technology built by Anchorage, one of the first US-regulated cryptocurrency custodians. Recently, the company was selected by BlackRock to manage crypto ETF assets.
“Anchorage's institutional custodial and subaccount structure means the customer is never a creditor,” Claver said. “These are always your assets. They're in your account. In effect, that's what your cryptocurrency Schwab account basically ends up being.”
This allows for far more complex and nuanced structures than just a few people holding the keys to a cold wallet (a means of holding crypto assets away from the harsh winds of the internet).
“You can have someone like your spouse be the beneficiary on your account,” Claver says. “If you have a fiduciary that needs to approve, for example an asset protection trust or another type of structure, you can add multiple signatories and control who has access to the assets, when and for what reasons.”
Trading crypto assets may not be for the faint of heart, as it is prone to periods of intense volatility, but the industry has amassed enormous wealth for investors in recent years and continues to produce even wealthier individuals with each cycle. According to a recent study, the global population of crypto millionaires will increase by 40% year-on-year by 2025.
That said, the lack of adult advice and basic crypto asset management that Ascension offers was highlighted in a recent study by Swiss software company Avalock, which revealed that the traditional asset sector is under increasing pressure to provide digital assets to wealthy customers. In the UAE, for example, 63% of ultra-high-net-worth investors have replaced or are considering replacing management.
family office kids
What often happens is that the children of the super-rich educate their elders about digital assets. Children of family offices, a generation that grew up with cryptocurrencies, are buying large amounts of tokens on exchanges like Coinbase and Binance using their laptops and mobile phones.
Mr. Clavell said Ascension's initial conversations are primarily with second- or third-generation members of family offices, guided through the company's social media presence. The next step is to schedule a phone call with the elders.
“This is usually a conversation with the chief or chieftain where we explain that this is the next version of the internet, that there are certain protocols and networks that will be used for public infrastructure, and that this is a kind of hedge against other positions that they may have,” he said.
Often the second or third generation that brings the conversation to the table is given millions of dollars to invest in digital assets to see how it works. In most cases, that percentage will be less than 1%, Claver says.
“If they want to make a large allocation to a particular cryptocurrency (Bitcoin, Ethereum, SOL, Matic, Chainlink, XRP, XLM, HBAR, whatever it is), we help them make that allocation. Or if those allocations are already in a cold wallet If you have one and don't have a continuity plan built around it, you can put it in institutional custody. That way you have a guarantee and a plan instead of writing keys and words down on paper.''Several people may have a wallet and have to reconfigure it every quarter for reconciliation. ”
Claver acknowledges that things have evolved since the early days of Bitcoin Libertarianism. Most importantly, the demographics of these early holders have changed, with many now in the 40+ age group. And when you suddenly have a lot of capital to protect, everyone's perspective starts to change, he added.
“If you have a few hundred grand or even a few million dollars, you might be able to comfortably manage the risks associated with it like putting cash into a mattress. I get that,” Claver said. “But when it becomes $20, $50, $100 million or even $1 billion, it's a whole different animal.”
