Summary: Wealthfront, known for its automated investment services and high-yield cash accounts, currently limits crypto exposure to 10% of your portfolio through cryptocurrency trusts like GBTC and ETHE. While it's a trusted platform regulated in the United States, its cautious approach to crypto might not be suitable for those looking to heavily invest in digital assets.
For a more crypto-focused experience, we recommend platforms like Kraken, a US-based digital asset exchange that's also regulated. Kraken offers over 200 cryptocurrencies, with competitive trading fees that start at just 0.16%. When deciding on a platform for your crypto investments, make sure to weigh crucial aspects such as fees, regulatory status, and the diversity of asset options available.
Can I Buy Crypto with Wealthfront?
Currently, Wealthfront does not offer the option to directly invest in cryptocurrencies within its brokerage platform. The only method for investors to get access to the sector on Wealthfront is by purchasing crypto ETFs that are linked to the underlying asset (e.g. Grayscale Bitcoin Trust) or a company involved in the sector like Coinbase.
Investors should be cautious when considering these alternatives, as they come with risks like regulatory hurdles and management complexities. Past fluctuations in asset performance against the underlying, like the Grayscale Bitcoin Trust, illustrate these risks. Additionally, these options carry higher costs than directly investing in cryptocurrencies like Bitcoin or Ethereum.
How to Buy Crypto with Wealthfront
If you're exploring options for cryptocurrency investment beyond Wealthfront, you might consider a crypto platform in the US that is FinCEN-compliant. Kraken is one such platform we recommend, especially over other well-known platforms like Coinbase. Kraken offers a better fee structure, more competitive spreads, and over 200 crypto assets to trade and stake to earn yield.
Here's how to get started with Kraken for your crypto investments:
- Visit Kraken’s website and complete the necessary identity verification.
- Find the 'Deposit’ button, often located at the top right of the screen.
- Decide on the amount you want to deposit in USD and pick your preferred deposit method, such as an ACH transfer or a credit/debit card.
- Finalize the deposit, and you'll be all set to invest in a diverse selection of cryptocurrencies.
What are the Fees?
Trading on Wealthfront comes with its own set of charges, including spreads of 1-1.5% on stocks and a 0.25% annual management fee. These costs are something you should be aware of when considering your investment options on the platform.
If you're exploring alternative avenues for cryptocurrency trading, Kraken is a platform worth considering. Not only does it feature a competitive fee structure ranging from 0.16% to 0.26% based on your trade volume, but it also offers free USD deposits through ACH transfers. This positions Kraken as a cost-effective solution for trading cryptocurrencies, presenting a viable option for investors keen on diversifying their portfolios beyond what Wealthfront can provide.
Will Wealthfront Offer Crypto Assets?
At this time, it doesn't appear that Wealthfront will be adding direct cryptocurrency investments to its offerings anytime soon. The platform's current cautious approach to crypto is evident in its policy restricting cryptocurrency trust holdings, such as GBTC for Bitcoin and ETHE for Ethereum, to only 10% of a client's total portfolio. This limitation is designed to reduce investment risk, suggesting that Wealthfront will likely maintain its conservative stance on cryptocurrencies for the foreseeable future.
Wealthfront is a tech-driven financial platform that stands out for its versatile approach to helping you grow your wealth. From industry-leading 4.80% APY cash accounts to specialized bond ETF portfolios and automated long-term investment options, the platform is designed to serve your immediate and future financial goals with minimum hassle.
Trusted by over 650,000 clients and managing over $43 billion in assets, Wealthfront offers an end-to-end financial solution that's not only automated but also customizable to your specific needs and tax situation.
In conclusion, while Wealthfront offers a trusted and regulated environment for automated investing, its cautious approach limits direct crypto investment opportunities to just 10% of your portfolio through specific trusts.
If you're keen on diversifying into cryptocurrencies more extensively, Kraken emerges as a competitive alternative with its US-based, FinCEN-compliant platform, low fees, and extensive asset offerings. As you weigh your options, consider factors such as fees, regulatory status, and asset diversity to make an informed investment decision.