Wealthfront Adds Cryptocurrency Investments to Its Platform

Wealthfront, a leading online financial advisor, has expanded its services to include cryptocurrency investments. This move marks a significant shift in the company's approach to wealth management.

Wealthfront's platform now allows users to allocate up to 20% of their portfolio to cryptocurrencies. This is a notable increase from the previous limit of 1%.

Investors can choose from a range of cryptocurrencies, including Bitcoin and Ethereum.

Wealthfront has made it possible for users to invest in cryptocurrency without needing a wallet or account on a cryptocurrency exchange.

The company has added Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE) to its menu of available investments, allowing users to allocate up to 10% of their total portfolio to these trusts.

Wealthfront's users can now choose from a bigger selection of ARK ETFs, pick ETFs that are specific to industries like cannabis or self-driving cars, or choose from a larger pool of socially responsible investments.

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The expense ratio for the Grayscale Bitcoin Trust is 2%, and for the Grayscale Ethereum Trust, it's 2.5%.

Investors won't be able to borrow against their crypto assets for a loan via Wealthfront's portfolio line of credit, but the Risk Parity Fund is also ineligible for this product.

Rebalancing may occur more often with crypto than other assets, and if the value of the crypto trusts suddenly rises or falls, a rebalancing action will occur to limit an individual portfolio to no more than a 15% allocation to crypto.

Wealthfront aims to provide a responsible platform for investing in crypto, ensuring clients can do so in a secure, fiduciary manner.

Wealthfront has added two new cryptocurrency investments to its platform: Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE).

These trusts provide indirect exposure to cryptocurrency, and investors can allocate up to 10% of their portfolio to them.

Wealthfront's users can now choose from a bigger selection of ARK ETFs, pick ETFs specific to industries like cannabis or self-driving cars, or choose from a larger pool of socially responsible investments.

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The expense ratio for the trusts is 2% for GBTC and 2.5% for ETHE.

Wealthfront's algorithms will limit an individual portfolio to no more than a 15% allocation to crypto if the value of the crypto trusts suddenly rises or falls and the percentage of the digital assets deviates five percentage points from the investor's target.

Investors won't be able to allocate more than 10% of their total portfolios into GBTC or ETHE, and they won't be able to borrow against their crypto assets for a loan via the robo's portfolio line of credit.

Wealthfront has given the green light to investment in cryptocurrencies, signaling increased acceptance of digital assets by traditional finance. This move is part of a broader trend as more fintech companies diversify their offerings.

Wealthfront's clients can now invest in Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE), with no need for wallets or cryptocurrency exchange accounts. However, such investments can be risky and more volatile than most ETFs, so Wealthfront limits clients to allocating no more than 10% of their total portfolios into GBTC or ETHE.

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Wealthfront's portfolios will continue to be rebalanced automatically, and users will receive feedback on how their investment choices affect the risk levels of their portfolios. This is no different than how Wealthfront rebalances portfolios historically.

The expense ratio for the trusts is 2% for the Grayscale Bitcoin Trust and 2.5% for the Grayscale Ethereum Trust. This is in addition to the company's usual menu of ETFs, which now includes a bigger selection of ARK ETFs and socially responsible investments.

Wealthfront aims to provide a responsible platform, ensuring clients can invest in crypto in a secure, fiduciary manner. The company's co-founder and chief strategy officer, Dan Carroll, explained that the changes reflect a growing demand from Millennial and Gen Z investors for more control over their investments.

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