How Northland Added Bitcoin to Client Portfolios
- Nov 4, 2019
- 9 min read
Updated: Mar 17
Editor’s Note (March 2026): This article was originally published in November 2019, when Bitcoin traded near US$9,200 and Northland had just completed its initial allocation for client families. Since then, Bitcoin has appreciated significantly (trading near US$74,000 as of mid-March 2026), Canada approved the world’s first Bitcoin ETF in February 2021, and the U.S. followed with spot Bitcoin ETF approvals in January 2024. The due diligence process and network described below—which we believe to be without precedent in the global wealth advisory industry—remain the foundation of Northland’s approach to digital assets. The article has been updated to reflect the current landscape while preserving the original decision framework.
In the spring of 2019, Northland Wealth became one of the first registered portfolio managers in Canada to allocate client capital to Bitcoin. The decision followed what we believe to be the most extensive due diligence process ever undertaken by a wealth advisory firm before making a Bitcoin allocation: more than 2,000 hours of research spanning two years, and direct engagement with institutional leaders at BlackRock, Fidelity Digital Assets, Pantera Capital, Galaxy Digital, Van Eck, Morgan Creek Capital, Grayscale, Castle Island Ventures, and Arca, among others. To our knowledge, no other advisory firm in Canada, the United States, Europe, or Asia conducted this depth of research or built this calibre of network before committing client capital to digital assets. This article describes the framework Northland used and why the process matters as much as the allocation itself.
Why Does Asset Allocation Matter More Than Security Selection?
Asset allocation is the process of distributing investment capital across major categories: cash, fixed income, equities, real estate, commodities, and alternative strategies. Each category carries distinct risk, return, and correlation characteristics. For UHNW families with complex, multi-generational objectives, the allocation decision is the single most consequential investment choice.
Research published by the CFA Institute confirms that more than 90% of a portfolio’s return variability over time is attributable to asset allocation, not to the selection of individual securities within those categories. In practical terms, the decision to hold equities matters more than choosing between Royal Bank and TD Bank stock. This is why Northland’s investment process begins with a strategic asset allocation framework before any individual manager or security is considered.
What Prompted Northland to Evaluate Bitcoin as an Asset Class?
Northland’s investment team first began researching Bitcoin seriously in 2017. Two developments made the asset class worthy of institutional evaluation. First, the emergence of regulated custody solutions and derivatives markets suggested that infrastructure was maturing beyond the early retail-only phase. Second, the global monetary policy environment—with central banks pushing interest rates to zero and below—raised fundamental questions about the long-term purchasing power of fiat currencies.
We do not add asset classes to client portfolios based on enthusiasm or media coverage. The bar for introducing a new allocation is high: the asset must offer a differentiated return stream, demonstrate sufficiently low correlation to existing holdings that it improves portfolio-level risk-adjusted returns, and have an investment vehicle that meets institutional custody and compliance standards.
Bitcoin met those criteria after extensive evaluation. Its correlation to traditional equities and fixed income was low over meaningful time horizons, its asymmetric return profile (where upside potential significantly exceeds downside in a sized position) was attractive, and regulated access vehicles were becoming available. The appeal of Bitcoin was further elevated by the growing uncertainty around the monetary policies being employed by central banks globally, a thesis we explored in our companion article on negative interest rates.
How Did Northland Conduct the Most Extensive Bitcoin Due Diligence in the Wealth Advisory Industry?
Northland invested more than 2,000 hours over approximately two years researching Bitcoin and the broader digital asset ecosystem before making the first client allocation. To our knowledge, no other wealth advisory firm—in Canada, the United States, Europe, or Asia—conducted this depth of due diligence before committing client capital to Bitcoin.
This was not a desktop exercise. Members of the investment team traveled extensively and met directly with many of the most prominent institutional investors and thought leaders in the digital asset space. The network that Northland built through this process is unique in the wealth advisory industry, and it remains a core competitive advantage in how we evaluate and manage digital asset exposure for our client families.
Those meetings spanned the full range of questions a fiduciary must answer before allocating client capital to a new asset class. What follows is a summary of the key relationships and what each contributed to our understanding.
Institutional Asset Management Perspective
Understanding how the world’s largest asset managers were approaching Bitcoin was essential. We engaged directly with Robbie Mitchnick, Head of Digital Assets at BlackRock (now managing approximately $14 trillion in assets globally), and with the team at Fidelity Digital Assets, the digital asset subsidiary of the $7 trillion family-owned asset manager. We also met with Grayscale, at the time a $3 billion cryptoasset manager that has since grown to approximately $35 billion in AUM and launched multiple regulated ETF products.
These conversations gave us a clear view of how institutional infrastructure was developing, what custody standards were being adopted, and how the regulatory pathway for Bitcoin investment products was likely to unfold. When the Head of Digital Assets at the world’s largest asset manager is building an institutional-grade platform, it tells you something about where the industry is heading. We wanted to understand the specifics firsthand, not secondhand through media coverage.
Dedicated Crypto Fund Managers and Venture Investors
The next layer of due diligence involved dedicated digital asset fund managers who had been allocating capital in this space for years. Dan Morehead, a former Tiger Cub and founder of Pantera Capital, had built one of the longest institutional track records in digital assets. Mike Novogratz’s Galaxy Digital in New York was operating as a merchant bank and family office with deep exposure across the crypto ecosystem. Mark Yusko and Anthony “Pomp” Pompliano of Morgan Creek Capital, hosts of the Off the Chain podcast, provided a venture-oriented perspective on where value was accruing in the Bitcoin network. Nic Carter and Matt Walsh of Castle Island Ventures, backed by Fidelity, brought a private equity lens to Bitcoin infrastructure businesses.
These were not casual introductions. Each meeting was part of a structured process to stress-test our investment thesis from different angles: the macroeconomic case, the technology adoption curve, the venture capital pipeline, and the institutional demand trajectory. No other advisory firm we are aware of assembled this range of dedicated crypto fund managers into a single due diligence process.
ETF Development and Market Structure
Gabor Gurbacs at Van Eck, a firm with approximately $115 billion in assets under management, was at the forefront of efforts to bring a Bitcoin ETF to market in the United States. Van Eck eventually launched one of the first spot Bitcoin ETFs approved by the SEC in January 2024. David Nage, then of the Baselayer podcast and Arca, an institutional digital asset manager, provided insight into market microstructure, liquidity, and the evolving regulatory landscape.
These conversations were critical for understanding how investment vehicles would develop and which structures would meet the compliance standards required for use in client portfolios. The relationships Northland built during this period meant that when regulated ETF products finally launched—first in Canada in 2021, then in the U.S. in 2024—we already understood the underlying infrastructure, the custody arrangements, and the counterparties involved. We were not learning about these products from a press release. We had been in direct dialogue with the people building them for years.
Protocol-Level Research
Understanding Bitcoin at the protocol level—not just as a financial instrument but as a technology—was equally important. Pierre Rochard, Co-Founder of the Satoshi Nakamoto Institute, provided depth on Bitcoin’s technical architecture, monetary policy design, and the game theory that underpins the network’s security model. This technical grounding informed our conviction that Bitcoin’s scarcity mechanism and decentralized consensus model are genuinely differentiated, not simply marketing claims.
Beyond these direct meetings, thousands of additional hours went into reading, listening to podcast interviews, attending conference presentations, and participating in calls across the digital asset industry. The due diligence was comprehensive and ongoing. It did not stop when we made the first allocation, and the network we built continues to inform every decision we make in this space. Northland’s network today extends to professionals who have advised on the U.S. strategic Bitcoin reserve discussions and major ETF launches globally.
What Operational Risks Did Northland Evaluate?
• Custody: Who holds the underlying Bitcoin on behalf of our clients, and where? What insurance and security protocols protect against theft or loss? How are private cryptographic keys managed?
• Pricing and audit: How is the asset priced, and can it be independently verified? What audit standards apply?
• Regulatory status: Does the investment vehicle meet the standards required for registered accounts? Is it subject to regulatory oversight by a recognized securities commission?
• Counterparty risk: What is the creditworthiness and operational integrity of the vehicle’s issuer, custodian, and service providers?
Custody was the single most important operational consideration. Unlike traditional securities held by a custodian bank, Bitcoin’s ownership is determined by control of private cryptographic keys. The loss of those keys means permanent, irrecoverable loss of the asset. Northland evaluated multiple custody solutions, focusing on institutional-grade providers with insurance coverage, multi-signature key management, and regulatory oversight. The depth of our network—relationships with the people actually building custody infrastructure at firms like Fidelity and others—gave us visibility into these solutions that no amount of desktop research could replicate.
How Did Northland Implement the Bitcoin Allocation?
After concluding that Bitcoin warranted inclusion in client asset allocations, Northland’s team evaluated the available investment vehicles. The options included direct on-chain acquisition (buying Bitcoin directly and holding private keys), closed-end trusts trading on public exchanges, and early exchange-traded products.
A key consideration for Canadian families was tax efficiency. Bitcoin’s asymmetric return characteristics—where a small position can generate outsized gains—make tax-sheltered accounts (TFSAs and RRSPs) particularly attractive vehicles. In 2019, buying Bitcoin directly inside a registered account was not straightforward. Northland identified regulated investment vehicles that could be held within these structures, allowing clients to shelter potential gains from immediate taxation.
Since then, the investment landscape has evolved dramatically. Canada approved the world’s first Bitcoin ETF (Purpose Bitcoin ETF) in February 2021, and the U.S. followed with spot Bitcoin ETF approvals in January 2024. These regulated ETF products have become the primary vehicle Northland uses for client Bitcoin allocations, offering institutional custody, transparent pricing, regulatory oversight, and seamless compatibility with registered accounts.
What Has the Bitcoin Allocation Meant for Client Portfolios?
Northland’s initial Bitcoin allocation in spring 2019 preceded a period of substantial appreciation in the asset class. In 2019, most of our client families held Bitcoin at 2.5% to 7.5% of their portfolios. Allocations have evolved from there based on each family’s risk tolerance, time horizon, and overall portfolio construction.
The significance of Northland’s early conviction has been recognized by leaders across the digital asset industry. Hunter Horsley, CEO of Bitwise Asset Management—the largest crypto index fund manager in America, which now serves more than 3,000 RIAs, family offices, and institutional investors—has observed that the broader wealth management industry is now arriving at the same conclusions about Bitcoin that Northland reached years earlier. In a conversation on The Artisan Podcast, Horsley noted that other firms and family offices “came to the same conclusion, they just took longer,” and as a result their clients are making first allocations at multiples of the price Northland’s families paid. That pattern continues to play out as institutional adoption accelerates globally.
More important than any single period’s return is what the allocation demonstrates about Northland’s investment process. Adding Bitcoin was not a speculative bet or a reaction to media hype. It was the product of the most extensive due diligence process we are aware of in the global wealth advisory industry:
• More than 2,000 hours of dedicated research over two years;
• Direct engagement with institutional leaders at BlackRock, Fidelity, Pantera Capital, Galaxy Digital, Van Eck, Morgan Creek Capital, Grayscale, Castle Island Ventures, and Arca;
• A network spanning asset management, venture capital, ETF development, market structure, and protocol-level research that no other advisory firm had assembled;
• Rigorous operational due diligence on custody, pricing, regulatory status, and counterparty risk;
• Tax-efficient implementation through vehicles compatible with registered accounts
The same fiduciary standard Northland applies to private equity, private credit, real estate, and infrastructure manager selection was applied to Bitcoin. The asset class is different. The diligence standard—and the depth of network behind it—is what sets Northland apart.
Frequently Asked Questions
About the Author
Arthur Salzer, CFA, CIM is the Founder and CEO of Northland Wealth Management Inc., an independent multi-family office. Arthur has been recognized as Portfolio Manager of the Year and is a two-time winner of Advisor of the Year – Alternative Investments. Beginning in 2017, Arthur conducted what is believed to be the most extensive Bitcoin due diligence process ever undertaken by a wealth advisory professional—more than 2,000 hours of research and direct engagement with institutional leaders at BlackRock, Fidelity, Pantera Capital, Galaxy Digital, Van Eck, and others—before making Northland’s first allocation in 2019. Hunter Horsley, CEO of Bitwise Asset Management, has described Arthur as having “the clearest thinking a lot faster than most people” on Bitcoin. The network Arthur built through that process is unique in the global advisory industry and extends today to professionals who have advised on major ETF launches and the U.S. strategic Bitcoin reserve. From 2016 to 2022, Arthur authored the Curve Appeal column in Financial Post Magazine.
