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How to Buy Crypto with Wealthfront

How to Buy Crypto with Wealthfront

Learn how Wealthfront approaches crypto investing and the key factors to weigh when selecting a platform to diversify your asset holdings.

Summary: Wealthfront allows entry into the cryptocurrency market via crypto-backed ETFs, such as the Blackrock Bitcoin ETF, but doesn't enable direct crypto trading. It's important for investors to be aware of the higher risks and expenses associated with ETFs versus direct cryptocurrency investments.

Based on our analysis, Kraken emerges as a compelling alternative for those looking to directly trade cryptocurrencies, offering lower fees, over 200 crypto assets and advanced features like staking.

Top Crypto Alternative to Wealthfront - Kraken
5.0 out of 5.0 by Datawallet
Kraken stands out as the best alternative to Wealthfront for crypto investing due to its US-based, FinCEN-compliant status, competitive fee structure, and diverse offering of over 200 cryptocurrencies.
Licenses
FinCEN, FCA, FINTRAC, ASIC and more.
Available Assets
200+ Cryptocurrencies to Trade and Stake (Spot and Margin markets).
Deposit Methods
ACH Transfer, FedWire, Plaid, credit card, debit card and more.

Kraken is a regulated U.S. entity with FinCEN registration and a Special Purpose Depository Institution charter in Wyoming for digital asset-related services.

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Can I Buy Crypto with Wealthfront?

Yes, you can invest in the crypto sector with Wealthfront by opting for crypto-backed ETFs, such as the Blackrock Bitcoin ETF. While Wealthfront doesn't let you directly buy cryptocurrencies within its brokerage platform, these ETFs offer a bridge to the sector by tracking crypto assets or companies in the crypto space like Coinbase.

However, tread carefully. Investing in crypto ETFs involves risks, including regulatory challenges and the complexities of asset management. Moreover, the costs are generally higher compared to direct crypto investments. It's essential to understand these risks, as past asset performance has shown volatility. Keep in mind, investing in crypto via ETFs doesn't shield you from the market's inherent risks.

How to Buy Crypto with Wealthfront

For those seeking cryptocurrency investment options outside Wealthfront, a US-based, FinCEN-compliant crypto platform like Kraken is a strong choice. It stands out from other popular platforms such as Coinbase, offering a more favorable fee structure, competitive spreads, and access to over 200 cryptocurrencies for trading and staking to earn yield.

Here is a simple 4 step guide to getting started with Kraken:

  1. Account Setup: Navigate to Kraken’s website to sign up and go through the necessary identity verification process.
  2. Making a Deposit: Look for the 'Deposit' button, typically found in the top right corner of the screen.
  3. Deposit Details: Decide how much you want to deposit in USD and choose your preferred deposit method (e.g., ACH transfer or credit/debit card).
  4. Investment Freedom: Complete your deposit to start investing in a wide array of cryptocurrencies.
Buy Bitcoin and Crypto with SoFi

What are the Fees?

Investing through Wealthfront involves certain fees you should know about, including stock spreads from 1 to 1.5% and an annual management charge of 0.25%. These costs are an essential factor to consider when evaluating your investment strategies on the platform.

For those looking into other options for cryptocurrency trading, Kraken stands out. It boasts a fee structure that varies between 0.16% and 0.26% depending on your trading volume, plus it allows for free USD deposits via ACH transfers. With its competitive fees, Kraken emerges as an economical choice for trading cryptocurrencies, offering an attractive alternative for investors looking to expand their portfolios beyond Wealthfront's offerings.

Will Wealthfront Offer Crypto Assets?

Currently, Wealthfront doesn't seem to be gearing up to introduce direct cryptocurrency investments into its portfolio. The platform's careful stance on crypto is highlighted by its rule that caps holdings in cryptocurrency trusts, like Grayscale's Bitcoin Trust (GBTC for Bitcoin) and Ethereum Trust (ETHE for Ethereum), at a maximum of 10% of a client's overall portfolio.

This precaution aims to minimize investment risks, indicating that Wealthfront is expected to continue its cautious approach towards cryptocurrencies for the time being.

Wealthfront

Bottom Line

In summary, Wealthfront opens a path to crypto investments through ETFs, yet investors should carefully weigh the risks and higher costs involved. For direct crypto trading, Kraken offers an appealing choice with its competitive fees and broad selection of cryptocurrencies. Wealthfront's cautious stance, evidenced by limiting crypto trust holdings, mirrors a wider investment caution towards cryptocurrencies. Whether through ETFs on Wealthfront or trading on Kraken, thorough research and risk awareness are key for anyone looking to venture into the crypto space.

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