About Onramp: Our Firm's Philosophy and Approach to Custody

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Our Approach To Custody
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Onramp: A Bitcoin Asset Management Platform Built on Multi-Institution Custody

Best-in-class financial products and solutions to onboard HNWI, Family Offices, and Institutions to bitcoin the right way.

Why Onramp

In April of 2023, Onramp brought to market the first ever security-like vehicle for bitcoin exposure leveraging multi-institution custody. The Onramp Bitcoin Trust – a grantor trust governed by the Wyoming Statutory Trust Act – provides clients with 1-1 exposure to spot bitcoin that is held in a 2-of-3 multisig vault with private keys distributed across three separate institutions – Onramp, BitGo, and Coincover (based in the UK). Importantly, the trust structure allows for in-specie redemptions without a taxable event, a step-function improvement upon existing bitcoin trust structures and ETF vehicles.

Given the demand we observed in the summer of 2023 for bitcoin-exposure vehicles leveraging the multi-institution custody model, Onramp relaunched in the fall to realize our full vision – a comprehensive global bitcoin asset management platform purpose-built for institutions and HNWIs, all built on the foundation of multi-institution custody.

In pursuit of our overarching goal to provide clients with a differentiated form of bitcoin custody that maximizes security while minimizing counterparty risk, we expanded our platform beyond the Onramp Bitcoin Trust, in partnership with BitGo, to bring to market the very first multi-institution custody solution requiring multiple financial services entities to independently onboard and verify a client’s unique controls when processing withdrawal requests. BitGo, having pioneered the first implementation of a multi-signature wallet and being the industry leader in bitcoin infrastructure for the past 10 years, was a natural partner for us to bring this custodial offering to market. We were equally excited to deepen our relationship with Coincover to fortify our institutional key partner quorum for Onramp’s growing global client base.

The Onramp Advantage

Experience: The Onramp team has diverse experience across the investment management, private wealth, venture capital, technology and management consulting industries at reputable firms such as Bain & Co, Brown Brothers Harriman, Stifel, Google, and Unchained. Since our initial launch, we’ve bolstered our executive team with individuals who understand both the worlds of bitcoin and traditional finance and are well equipped to deliver differentiated products and services designed to suit the needs of our investor base. Additionally, we are excited to share that David Thayer, executive advisor at Blackstone, has joined Onramp’s strategic advisory board.

Expertise: Drawing from extensive experience serving HNWIs, Family Offices, and Institutions, Onramp understands that the technical requirements of self-custody deter many investors. Through the experience gained from onboarding thousands of clients to bitcoin and billions of dollars to multisig bitcoin custody, we believe we’ve built the ideal custody solution to onboard the masses, combining the strengths of bitcoin’s native properties with the advantages of traditional institutional-grade custody.

Bitcoin Education & Advisory: At Onramp, we pride ourselves on being more than just an asset management firm; we’re educators at our core. We recognize that investors are all at different stages of their bitcoin journeys, and their ability to make successful long-term investment decisions is a function of strengthening their knowledge of this unique asset. That is why we’ve positioned research and education as the bedrock of our business strategy, aiming to provide investors with a comprehensive set of high-quality bitcoin resources, including written research (Onramp Deep Dives, Weekly Roundups, Jesse Myers’ Once-in-a-Species), rich video content (podcasts & webinars), and analytic tools (Onramp Terminal).

Bitcoin-only

At Onramp, we believe bitcoin is the most important asset for portfolios in the 21st century. As the most robust and decentralized form of non-sovereign money in the digital age, bitcoin has already achieved a dominant network effect that is insurmountable by other crypto-assets. Accordingly, we believe bitcoin is the only digital asset suitable for sophisticated portfolios and we share regulators’ view that bitcoin is a commodity, while other "crypto assets'' are unregistered securities, according to existing regulatory precedent.

Why Education Matters

We believe that high-quality bitcoin education is the critical component in being able to realize the fullest extent of bitcoin’s performance. While it’s easy to get bitcoin exposure, it’s hard to hold bitcoin long enough to see major upside. Part of the solution is a trust-minimized form of custody, but deeply understanding the fundamental tenets of this novel asset are also paramount to long-term investment success. Onramp is deeply committed to building clients’ bitcoin knowledge & conviction so that they can successfully weather the volatility & avoid the many pitfalls of “crypto”.

Why Custody Matters

The first fifteen years of bitcoin’s existence have been fraught with custodial mishaps, from misplaced private keys to exchange hacks, and an array of failures in between. A first-of-its-kind, digital bearer instrument, secured via cryptographic material, bitcoin simply does not map neatly to the traditional financial world with respect to its inherent custodial properties.

While self-custody remains a worthwhile option for many individuals, the reality of the situation is multifold:

most institutions and HNWIs are not organizationally prepared and/or willing to take on the personal responsibility of securing cryptographic information (i.e., private keys),
the concept of custody through intermediaries dates back thousands of years and the modern financial system relies on third-party custodians to secure its assets and offer financial services.
there are inherent limitations to the bitcoin protocol that would make it difficult for every person on earth to individually secure the asset in self-custody.

For these reasons, there must exist some level of custodianship for the bitcoin ecosystem in order for it to scale to the masses. Particularly in the institutional realm, trusted intermediaries are a necessary component of bitcoin’s broader adoption as a financial asset. As mentioned, however, bitcoin is a unique asset in that if a custodial arrangement is compromised, the bitcoin can be lost forever. Moreover, if you are outsourcing custody to a single entity, there are minimal assurances that the bitcoin won’t be rehypothecated or bailed into a bankruptcy if the entity becomes insolvent.

Therefore, trusting a single entity as a custodial counterparty, an industry norm in the traditional financial world, comes with tremendous risk. The status quo of obtaining bitcoin exposure with a single point of failure (i.e., a single custodian) not only infringes upon the underlying value proposition of bitcoin as a uniquely trust-minimized asset but has justifiably prevented large pools of capital from entering the space. It’s worth considering that unlike most traditional asset classes, bitcoin’s risk profile includes the material possibility that an allocation could go to zero, not due to an incorrect investment thesis but simply the failures of a singularly trusted counterparty.

Why Multi-Institution Custody is the Future

At Onramp, we believe there is a better path forward, one that can unlock the trillions in institutional capital still sitting on the sidelines. By leveraging the native properties of the bitcoin protocol, which allow you to distribute access and control over a bitcoin address across multiple participants (i.e., multi-signature), we can reduce the counterparty risk associated with third-party custody by an order of magnitude. While multisig custody is already prevalent in the market today, these arrangements are still subject to a single point of failure if a single entity is in charge of managing all the keys to a multisig vault, as is typically the case.

What if, instead, the private keys are distributed not within different departments of a single entity but across entirely distinct financial service entities? What if we could secure bitcoin via a multisig vault managed by multiple institutional key holders, each with their own security processes and procedures, none of which have unilateral control over the asset?

This arrangement would eliminate any single point of failure, distribute counterparty risk, and minimize required trust, all while providing far greater assurances that a client’s bitcoin is secure and auditable on-chain. This form of “multi-institution multisig custody” represents the foundation of the bitcoin asset management platform Onramp is building – and our vision for how institutions and HNWIs can securely gain exposure to bitcoin.