Crypto Robo-Advisor App Makara Launches With SEC Green Light

Makara, which claims to be the first robo-advisor crypto app to be registered with the SEC, is launching today for U.S. residents and will be available on the App Store from Tuesday.

Over 20,000 people have already signed up to use the app, which has more than $1 million in assets under management—with some users already on board for the beta version, according to the announcement.  

The app, which will be available on Android in the coming weeks, gives users exposure to cryptocurrencies through a curated set of six baskets based on their interests and goals. The baskets include decentralized finance (DeFi,) and large-capitalization cryptocurrencies Bitcoin and Ethereum.

The app’s proprietary technology automatically rebalances clients’ baskets and takes care of all the buying, selling, and storing complexities for the underlying assets. 

The startup has partnered with the Gemini exchange for trading and custody.

Makara plugs a gap

Makara plans to charge a 1% management fee plus an annual fee that ranges from $25 to $75, depending on the size of the investor's portfolio. 

This is significantly higher than conventional robo-advisors, whose levy is typically around 0.25%. But fees have been waived for new customers for the first six months. 

Makara’s developers are convinced that this index-like exposure to cryptocurrencies is the key to an untapped market of retail investors in the absence of a Bitcoin ETF. 

“We believe Makara is solving real and existing obstacles for individuals accessing the cryptocurrency market, and seeing the initial interest from our waitlist gives us confidence that our thesis is correct,” said Jesse Proudman, co-founder and CEO of Makara.

Makara is a spin-off from hedge fund Strix Leviathan, backed in part by NFL legend Joe Montana. The fund developed its own crypto trading software, which means that Makara’s retail investors will get exposure to the same sort of strategies used by hedge funds—to a degree, at least.