Wealthfront Adds Crypto Investments to Its Trading Offerings

Wealthfront automated investment service firm has announced that it has added two cryptocurrency trusts to its variety of funds.

The robo-adviser, which has $21.5 billion in assets under management, added the Grayscale Bitcoin Trust and Grayscale Ethereum Trust to its menu of available investments, a list which also includes a handful of Dimensional Fund Advisors’ (DFA) new EFTs, a variety of ARK Invest’s actively-managed funds, and Wealthfront’s own Risk Parity fund.

Wealthfront customers will be able to allocate up to 10% of their total portfolio to the two trusts, with cryptocurrency’s volatility mentioned as the reason for the restriction.

The trusts provide “indirect exposure to cryptocurrency”, and customers opting to buy units of the trusts would not be able to allocate more than 10% of their portfolio. “We limit your allocation to [the crypto trusts] because, as a fiduciary, we act in your best interests at all times, and these investments can be riskier and more volatile than most ETFs,” Wealthfront stated.

The move made by Wealthfront makes it the first major robo-adviser in the US to provide its clients with cryptocurrency exposures. The new investment options have made it easy for clients to get exposure to Bitcoin and Ethereum right in their Wealthfront portfolio, no wallets required.

However, these crypto trusts come at a cost. While several of the new funds that Wealthfront offers are eligible for the tax-loss harvesting, that is not the case with digital asset trusts. Furthermore, Wealthfront stated that investors would not be able to borrow against their cryptocurrencies for a loan via the robo’s portfolio line of credit.

Crypto Changes Fortunes of Mainstream Firms

The announcement by Wealthfront comes at a time when a rising number of fund managers and wealth management firms are embracing the crypto market to tap a new client base and seize a source of fresh revenue.

In April this year, Wealthfront asset management firm announced that it was examining options to enable its clients to add crypto assets to their investment portfolios. Therefore, the US asset manager has implemented what it announced in the past as it has now begun allowing its customers to invest in cryptocurrencies.

The development is the latest indication of increasing acceptance of crypto assets by mainstream finance.

In March, Morgan Stanley became the first major US bank to provide its wealthy clients access to Bitcoin funds. Last month, JPMorgan Chase & Co started allowing all of its wealth management clients to access cryptocurrency funds. In May, Wells Fargo began offering cryptocurrency exposure to its wealthy clients.

Image source: Shutterstock


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Robo-Advisor Wealthfront Adds Bitcoin Exposure Offering

Robo-advisor giant Wealthfront will now let its 400,000 clients invest up to 10% of their portfolios in bitcoin through GBTC.

Robo-advisor giant Wealthfront has announced it will provide its nearly 400,000 clients with the option to get bitcoin exposure through Grayscale Bitcoin Trust (GBTC).

The firm, which provides a hands-free approach to investing and has $25 billion of assets under management (AUM), announced the new addition to its offerings on July 29. But clients will be limited to allocating up to 10% of their portfolios in bitcoin.

Wealthfront claimed the limit to be a protection because they consider GBTC an investment “riskier and more volatile than most ETFs.” The company also added new ETFs to its menu of investment options, including ARK, cannabis, self-driving cars, and fintech options.

But when it comes to bitcoin, those with brokerage accounts with Wealthfront will be given only one option for BTC exposure – GBTC. Grayscale’s bitcoin trust shares attempt to follow the BTC/USD market price, minus expenses and fees. Naturally, however, the investor won’t possess real bitcoin.

Wealthfront said it chose that investment vehicle because buying bitcoin “can feel intimidating – it takes time and effort to research all of the options, set up a wallet, and monitor an additional account.”

However, buying bitcoin and transferring it to a self-custodial wallet has become hassle-free nowadays. An individual can start small, using an exchange and their mobile phone as a wallet, and build up from there. Eventually, buying KYC-free bitcoin and using privacy-conscious tools will become effortless.

Additionally, going down the Bitcoin rabbit hole will enable the investor to acquire as much bitcoin as they see fit and custody it themselves to become a fully sovereign individual.


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$25B investment firm adds ‘riskier’ Grayscale GBTC and ETHE for clients

Bitcoin (BTC) and Ether (ETH) exposure has come to one of the world’s biggest automated investment firms.

In a blog post on July 29, Wealthfront, which has $25 billion in assets, confirmed that it had added two Grayscale funds to its suite of investment options.

GBTC buzz returns

The recent rise in cryptocurrency prices has kept institutional products such as Grayscale’s various funds in the spotlight.

Wealthfront, an example of a so-called “robo advisor” in the investments space, will now allow its clients exposure to the Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE).

“Buying cryptocurrency can feel intimidating — it takes time and effort to research all of the options, set up a wallet, and monitor an additional account. That’s why we’ve made it easy to get exposure to Bitcoin and Ethereum right in your Wealthfront portfolio, no wallets required,” the blog post explains.

“Instead of buying coins yourself, you can invest in


Clients will be able to have up to 10% of their portfolio in Grayscale products, a limit the firm attributes to the “riskier and more volatile” nature of crypto products.

The move nonetheless reduces the ease-of-access dilemma faced by those interested in Grayscale’s funds, which are not always directly available, and place strict rules on shareowners.

Alongside Grayscale, meanwhile, Wealthfront increased its offering of exchange-traded funds (ETFs) from ARK Invest, itself a major GBTC stakeholder.

ARK Invest’s GBTC holdings (purple). Source: Cathiesark.com

What unlocking?

The announcement comes as institutional interest in Bitcoin in particular shows no signs of decreasing at prices around $40,000.

Related: Bitcoin open interest mimics Q4 2020 as new report ‘cautiously optimistic’ on BTC rally

As Cointelegraph reported, exchange balances have fallen sharply this week, as over-the-counter (OTC) desks also see significant activity.

For its part, Grayscale has rid itself of a negative narrative surrounding unlocking of GBTC shares after the events had no perceptible impact on BTC price action.

Its CEO, Michael Sonnenshein, this week reiterated a pledge to turn all Grayscale crypto funds into ETFs at the earliest opportunity, subject to regulatory changes in the United States.