It’s been just over two years since the SEC approved the first spot crypto ETFs. Today there are more than three dozen such funds on the market with nearly $120 billion in assets under management. Advisor use of crypto ETFs has steadily risen in that time. However, they are not the only tools available for crypto allocations.
While crypto ETFs are an easy way to gain some crypto exposure, for other clients, more sophisticated products might be a better option. Those include SMAs, model portfolios, options-based crypto ETFs.
The latest significant development came last week when Prometheum Inc., a crypto platform designed to comply with SEC regulations and FINRA rules, through its subsidiary Prometheum Capital, launched Digital Brokerage Solutions. The product is a suite of correspondent clearing, custody and trading services that enable broker/dealers to offer clients access to crypto assets—including digitally-native securities, tokenized securities and select crypto tokens—through traditional brokerage accounts. Initial correspondent clearing clients included Arete Wealth Management, Network 1 Financial Securities and a clearing broker/dealer.
Through the tool, b/ds and their clients can interact with crypto assets through brokerage workflows and existing account structures. Prometheum Capital offers correspondent clearing services to both introducing and clearing broker/dealers, on a fully disclosed and omnibus basis.
“As products move on the chain, you need the infrastructure to empower that,” said Aaron Kaplan, founder and co-CEO of Prometheum. “The crypto industry was built at the expense of the brokerage industry that wasn’t able to participate in the digital space because of gold regulatory handcuffs. With this, advisors and b/ds can compete with crypto platforms. … The way I see it, you should be somewhere in the 5% to 10% range for allocations into crypto. Historically, b/ds and RIAs have not been able to do that. Once it’s integrated, they can offer these assets to users and allocate as they think is appropriate.”
In connection with the launch, Prometheum cleared and settled what it said was the first ETH transaction directly in a U.S. brokerage account.
“It’s working with the underlying token. It’s a really big deal,” Kaplan said. “It’s a major step forward for everyone.”
Prometheum was licensed as a digital custodian in 2023. In late 2025, it received correspondent clearing authority.
Arete Wealth entered into a fully disclosed correspondent clearing agreement with Prometheum Capital, enabling its advisor network to offer crypto and digital assets directly to client brokerage accounts through Arete’s existing wealth management platform. (Arete Wealth currently has about $7 billion in assets under advisement across more than 60 offices and 260 registered reps.)
“Adding digital and crypto assets through Prometheum Capital’s fully disclosed clearing means our advisors can manage clients’ investments and exposure to ETH and digital securities,” Arete Wealth CEO David Levine said in a statement. “Advising and managing clients’ exposure to digital assets will enable our advisor network to succeed as crypto assets become mainstream.”
In addition, Network 1, a full-service FINRA member b/d serving high-net-worth individuals, institutional investors, managed pension funds and hedge funds, also entered into an agreement with Prometheum Capital enabling it to extend ETH access directly to its clients’ brokerage accounts.
“We’ve seen significant interest. The b/d and advisor channels have been handcuffed,” Kaplan said. “They have lost clients. They have lost assets. For the first time, they can compete here.”
Nitrogen Adds Bitwise Model Portfolios
In separate news, this week, Bitwise Asset Management, a global crypto asset manager with $11 billion in client assets, and Nitrogen, an AI-powered suite of products for financial advisors, made Bitwise’s crypto model portfolios available on Nitrogen’s platform.
Bitwise launched the model portfolios earlier this year. The portfolios, tailored to serve different investor risk preferences, allow financial advisors to give their clients access to digital assets through ETFs, including spot crypto ETFs, crypto index ETFs, thematic ETFs and crypto equity ETFs.
“Partnering with Bitwise gives advisors a research-driven framework to put that into practice in the crypto space, and do it with confidence,” Justin Boatman, chief marketing officer and head of product strategy at Nitrogen, said in a statement. “Bitwise brings the kind of specialist expertise this space demands, and we’re proud to be the platform that puts it in front of tens of thousands of advisors.”
Crypto SMAs
Another firm offering a more sophisticated product is Eaglebrook Advisors, a digital asset platform that allows advisors to invest directly in crypto through tax-optimized separately managed accounts, including Bitcoin and Ethereum SMAs, custom SMAs and strategies managed by third-party investment managers.
The firm is now working with 105 wealth management firms that manage $2 trillion in assets overall, according to Chris King, CEO and founder of Eaglebrook.
The crypto SMAs offer several advantages over ETF exposure, including the ability to deliver tax alpha and help address concentrated positions by allowing investors to diversify into other crypto assets without triggering a taxable event.
“It’s a solution if you have, say, $10 million in Ethereum, or $500,000 in Solana,” King said. “It’s a seamless compliance solution that integrates into estate plans or can be put into a trust and integrated into reporting. That’s a big thing we’re doing. It adds AUM for advisors and revenue to their businesses.”
It is also direct ownership of underlying assets, unlike crypto ETFs.
“ETFs are easier to access, but you can’t generate tax alpha or own it directly. And there can be tracking error,” King said. “All you can do is sell into cash.”
Crypto ETFs Evolve
Within crypto ETFs themselves, the market has evolved in a few directions since the first round of launches.
While the initial batch of spot ETFs focused only on bitcoin, the SEC subsequently approved ones using other tokens, including Ethereum and Solana, as well as funds that offer baskets of different currencies or invest in crypto companies rather than crypto tokens.
Another major innovation has been the emergence of options-based ETFs, including protected Bitcoin ETFs, an area where asset manager Calamos has led the way. It currently offers a variety of funds (including laddered versions) with 100%, 90%, and 80% protection levels. (Investors give up some upside in exchange for protection on the downside.) The products could be particularly attractive for clients with large crypto holdings already, who want to protect their principal. The firm launched the products last October, and the ETFs performed as designed amid a sharp crypto selloff that occurred earlier this year. The ETFs hold $150 million in assets.
There’s also the NEOS Bitcoin High Income ETF (BTCI), an actively managed options income Bitcoin strategy with a $1.3 billion AUM, the largest Bitcoin options premium income ETF in the market. It distributes monthly income generated by writing call options on Bitcoin Futures ETFs. (BlackRock and Goldman Sachs have filed to launch similar strategies.)
Overall, according to FUSE Research, one-quarter of the financial advisors it has surveyed allocate to crypto, with RIAs and wirehouses doing so more than IBDs. As of November, an additional 15% of the advisors FUSE surveyed planned to use crypto within the next two years.
Analysis of 13-F filings also sheds light on RIA usage of crypto ETFs. Analysis from AdvizorPro found that only 4% of practicing RIAs hold any crypto ETFs. (That does not account for exposures to crypto outside of ETFs, however. More sophisticated clients often own crypto directly through crypto custodians or private vehicles. Those allocations do not show up in 13-F filings.)
A similar analysis of RIAs’ 13-Fs from Discovery Data found that BlackRock’s iShares Bitcoin Trust ETF (IBIT) is the most popular crypto ETF in the space. In fact, it accounts for just more than half ($22.7 billion) of the roughly $40 billion allocated to crypto ETFs by RIAs. iShares Ethereum Trust ETF (ETHA) is the second-most-popular ETF ($4.6 billion).
