Stackr
Market Recap
Crypto and Equities Rebound This Week
Stackr
Last week we covered the different types of wallets you get in crypto, including each wallets benefits and drawbacks. This provided a good overview of what is available and how using a combination can help you effectively manage your cryptoasset exposure.
This week, while very different from our normal writing, we thought we would present our own wallet called Stackr, we have been working on it for a while now, and it is something we are very proud of. Stackr isn't your "traditional" crypto wallet by any means; what we have done with Stackr is combine the best of old-world infrastructure with that of the new. Stackr is a wallet that sits inside your own personal trust. But before we get onto that, let's explore what a trust is in the first place.
What Is a Trust?
Trusts have existed since the Roman Empire. Today, many different types of trusts exist; however, all have three core parties involved: the trustor/settlor, trustee, and the beneficiary. There is also sometimes a fourth participant called the Protector.
A trust is set up when a settlor transfers ownership of their assets to the trustee. The trustee now has the legal responsibility to hold the assets for the trust's beneficiaries. The rules that dictate what the trust can do are governed by the trust agreement or trust deed, which is initially drafted when creating the trust.
Why Use a Trust?
Trust law and the corresponding benefits can vary significantly from jurisdiction to jurisdiction. Therefore, it is always advised to contact a tax professional or financial planner when deciding if setting up a trust makes sense for you as an individual.
Generally, though, trusts offer several benefits from a tax and asset protection perspective.
Firstly, what must always be kept in mind is that trust are a long-term savings solution. They aren't there to move money in and out of quickly, else most of the tax benefits disappear. So what can trust do?
Delay capital gains - a trust can allow you to move between different assets, from traditional ETF's, commodities or crypto, without triggering a capital gains event.
Reduced estate taxes - when you die, your assets can be taxed substantially by the state; through a trust, you can potentially avoid this through something like a step-up in basis, which can result in tax savings for the heirs of the trust.
Estate planning - future generations will be provided for with the wealth you have accumulated, in the way you want it to. A trust can also potentially help avoid lengthy and expensive probate processes through the nomination of beneficiaries.
Immigration/emigration - as either a digital nomad, an individual, entire family or members of the family, a trust can allow you to take advantage of any relevant tax, exchange control or other laws of the countries involved.
Privacy - In some countries, the will of someone who passes away can be made public information; this can result in creditors and other people who may want to claim from the estate aware of what is available. A trust can enhance your privacy as an individual or family.
While these are not the only benefits a trust can provide, they are some of the main reasons people set them up in the first place. As stated before, always contact a tax professional to see if a trust is an appropriate solution to your circumstances.
As with anything with benefits, there are also drawbacks that have traditionally been associated with a trust. The most common is that a trust is prohibitively expensive to set up and maintain for the average individual; therefore, we have seen only high net wealth individuals and families come to leverage them to their full potential.
Stackr intends to solve this while maintaining all the benefits.
What is Stackr?
Stackr is our solution to accessing a diverse range of investments, not only crypto-related but traditional as well. We have also flipped the traditional trust game on its head and used technology to deliver the service, something very hard to find before. You can be fully onboarded through the Stackr app, and once on the platform, you can track and manage your investments, all held through your own personalised trust structure at a low cost. We believe that Stackr is an ideal solution for the 21st-century saver.
What Assets Can You Hold in Stackr?
Stackr offers a variety of assets on the platform, from crypto to traditional investments.
Crypto
Stackr currently allows you to purchase both bitcoin and ethereum, the two largest crypto networks that exist today. We also provide the option for you to purchase two fully regulated crypto mutual funds, the Etherbridge Fund and the Voyager High Yield DeFi Fund, which offer more diverse exposure to crypto in general.
To make this possible and provide you with peace of mind, we have partnered with regulated custodians who have the necessary infrastructure and expertise to manage your crypto safely. While you don't hold the crypto yourself, this is a very important step in separating you from the assets to get the full benefit a trust structure provides.
As time goes on, we will increase the number of crypto-related products on the platform to provide you with a broad range of options.
Traditional
As we start heading into the fourth industrial revolution, the tools we use to make investments will change. Through Stackr, you can access investments like the Lima Unconstrained Fund, a machine learning-driven fund that tracks and intends to outperform the Vanguard Total Stock Market ETF. You can invest in ETF's such as the ARK Innovation ETF, ARK Next Generation Internet ETF, Amplify Transformational Data Sharing ETF or even something like the iShares Global Clean Energy ETF.
Through Stackr, we can even provide discretionary fund management solutions if needed. Below is a list of the investments you can currently make on Stackr:
These investment options will increase over time; we will focus on providing exposure to some of the market's most innovative and exciting opportunities. Stackr really can be a tool for those looking to save for the long term, both young and old and those who want to pass down wealth to future generations.
As a potential user, the next biggest consideration should be how Stackr works under the hood.
Stackr Trust: Under the Hood
Investments made through the Stackr platform are held by a sub-trust formed in Bermuda on behalf of each investor, which ensures that all investments will be safeguarded and governed by applicable Bermuda law.
The custodian of the assets in each sub-trust is Bank of N.T Butterfield & Son Limited, and the trustee is Altree Trust. The trustee establishes sub-trusts for eligible investors, and investments selected by the investor are made by the trustee for the investor's benefit.
Each sub-trust is a separate legal entity, and as such, its assets are effectively insulated from the general creditors of the trustee or other sub-trusts.
This added safety and protection, combined with Bermuda's financial security and political and economic stability, allow investors to better diversify their assets in times of economic and geopolitical risk. Lima Capital LLC is the appointed, regulated Investment Advisor to the Stackr Master Trust.
The combination of the above has allowed us to provide the service that Stackr does and provide you as the client with total peace of mind that your investments are safe and well looked after.
Stackr Key Facts and Costs
Stackr is an exciting product designed to allow everyday access to something usually only reserved for the high net wealth individual. Below are the costs that you can expect when using Stackr and some of the key facts you should know:
A Special Offer
Stackr was designed to make the process of accessing your own personal trust a seamless and cheap experience. While trusts aren't the right choice for everyone, and again, talk with a tax expert or your financial advisor to decide if it is, Stackr has the potential to change the way an everyday person can make investments and save for the long term. We are very proud to be a part of this fantastic project and look forward to the journey ahead with it.
If you have managed to get this far, well done! As a subscriber to the Etherbridge email, we are offering the first 50 readers who sign up and deposit as little as $500 a free Stackr account for the rest of 2022.
In the next few weeks, you will be able to download the Stackr app on both the Google Play Store and iStore!
In the meantime, you can start your application through the web app here and if you need any help signing up we have put together an explainer video for you that you can watch here.
Due to the financial nature of this product, even as an Etherbridge reader, we also have to include a disclaimer:
Investments in the funds and investment choices mentioned above are subject to risks. Investments can go down as well as up as a result of changes in the value of the investments. There is no assurance or guarantee of principal or performance. Investors may lose money, including possible loss of principal. Past performance is not a guide to future performance. The above email was written to provide a brief description of the features of Stackr and the investment choices available. It does not constitute an offer or solicitation to anyone in any jurisdiction. It is presented for information purposes only. Investments in the funds involve risks, which are described in the respective offering documentation. The current prospectus and relevant offering documentation for each investment choice (where applicable) as well as complete information on Stackr should be reviewed before investing. For more information, please speak to your Financial Advisor. Any discussion of risks contained herein with respect to any product or service should not be considered to be a disclosure of all risks or a complete discussion of the risks involved. Investors must make their own independent decisions regarding the suitability and risks of any strategies or financial instruments mentioned herein. Stackr is not available in the United States or to citizens or residents of the U.S. or Bermuda. This material is not to be distributed to any person while such person is physically present in the United States.
Notable Articles and News Stories This Week:
Bipartisan Bill Proposes Tax Exemption for Small Crypto Transactions
Four members of Congress — two Democrats and two Republicans — have proposed a bill designed to make the everyday use of digital assets more practical.
Currently, consumers are required to report any changes in a digital currency's value against the US dollar from the time they purchased it until it is used in a transaction. This is counted as taxable income.
The Virtual Currency Tax Fairness Act would exempt personal transactions made with digital currency when the gains are $200 or less. Rep. Suzan DelBene (D-Wash.) and David Schweikert (R-Ariz.) introduced the bill on Thursday.
DelBene said in a statement that the US tax code must evolve to support growth in the digital economy.
"Antiquated regulations around virtual currency do not take into account its potential for use in our daily lives, instead treating it more like a stock or ETF," she said. "However, virtual currency has evolved rapidly in the past few years with more opportunities to use it in our everyday lives."
Read more about the proposal here
Wormhole Parent Commits $320M Ether to Replace Massive DeFi Hack Losses
Wormhole's parent company has dug the DeFi protocol out of a $320 million hole. Jump Crypto replaced all 120,000 ether Wormhole lost Wednesday in the second biggest decentralised finance hack to date, a spokesperson told Blockworks.
The total value locked (TVL) on Solana fell about 12.3% from $8.55 billion Wednesday to $7.5 billion Thursday, according to DeFi Llama data.
"[Jump Crypto] believes in a multichain future and that [Wormhole] is essential infrastructure," the company wrote in a tweet. "That's why we replaced 120k ETH to make community members whole and support Wormhole now as it continues to develop."
Read more about the hack here
Zuckerberg Still 'Confident' In Metaverse Plans Despite Stock's 20% Slide
In an earnings call that underwhelmed Wall Street expectations, Facebook parent Meta disclosed a loss of more than $10 billion from the company's first forays into the metaverse.
The spending, via Meta's recently formed Reality Labs Division, contributed to a quarterly profit dip of 8%, according to the company's accounting. The social media giant warned investors of future "headwinds from both increased competition for people's time and a shift of engagement."
Of Meta's Web3 endeavours, CEO Mark Zuckerberg said the company's "path ahead is not perfectly defined," adding that he's "confident" in the unprecedented investment in the nascent space.
The mounting costs, however, may just be getting started, considering analysts project the social media giant to spend at least $60 billion to carry out its full metaverse vision.
Read more here
Whilst we all have the option to look, to seek to understand, it’s often easier not to. Bitcoin, Ethereum and distributed ledger technology are complex systems that require significant due diligence. At Etherbridge, we aim to lower the barriers to understanding this fast-growing digital economy.
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This is not financial advice. All opinions expressed here are our own. We encourage investors to do their own research before making any investments.