Crypto firms Arca and BlockTower merge as institutional interest in digital assets spikes

Key Takeaways

The merger of Arca and BlockTower targets stronger institutional digital asset offerings amid booming crypto markets.
Industry advancements, including record-breaking Bitcoin ETFs, highlight the growing demand for compliant crypto investment options.

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Crypto asset managers Arca and BlockTower have agreed to merge through an all-equity deal, amid a surge in crypto markets driven by Donald Trump’s primary election win.

The firms signed a Letter of Intent to unite their operations under a single brand, aiming to strengthen their institutional investment offerings in digital assets.

“We expect to see ongoing consolidation, the emergence of new investment vehicles, and unique investment opportunities that differ from anything currently available in finance,” said Jeff Dorman, Co-Founder and Chief Investment Officer at Arca.

Both companies are registered investment advisers under SEC regulation.

The merger combines Arca’s Los Angeles-based operations, established in 2018, with BlockTower’s Miami and New York presence, founded in 2017 by former Goldman Sachs and University of Chicago Endowment executives.

“Competing in the maturing digital assets space and serving our investors requires a constant fight for top talent. By merging with Arca, we’re excited to create a stronger investment team immediately,” said Ari Paul, Co-Founder and Chief Investment Officer at BlockTower.

The crypto industry has witnessed landmark advancements in recent months, including record-breaking performances of Bitcoin spot ETFs.

BlackRock’s iShares Bitcoin ETF, for instance, hit $40 billion in assets within 211 days, ranking in the top 1% of ETFs by size.

Rayne Steinberg, CEO at Arca, commented on the merger’s potential to meet institutional investors’ demands for regulatory-compliant digital asset offerings.

Steinberg believes the merger will provide expanded resources and expertise, enabling the firm to broaden its suite of investment products and meet the high demand for institutional-caliber, SEC-regulated options in the crypto space.

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