Robo-advisor Betterment has launched its crypto offering after completing a private beta phase. With the new cryptocurrency investment tool, customers can invest up to 5% of their upgrade balance in digital currencies like Bitcoin, Ethereum, and other popular currencies. The news comes on the heels of Betterment’s partnership with cryptocurrency exchange Gemini to offer cryptocurrency wallets.
key takeaways
- Betterment now offers automated cryptocurrency investing through its platform.
- Clients can invest up to 5% of their assets in a cryptocurrency portfolio.
- The Gemini cryptocurrency exchange acts as a custodian for Betterment’s cryptocurrency investment products.
Betterment offers a new automated cryptocurrency investment product
Betterment’s new offering, Crypto for Betterment, has customizable portfolios that offer curated selections of digital assets. Investors can choose from four crypto wallets: Universe, Sustainable, Metaverse, and Decentralized Finance. Each portfolio focuses on different genres of cryptocurrency assets.
The Universe wallet has more than two dozen different coins from popular projects. Sustainable invests only in coins that use less energy than Bitcoin and other notoriously energy-hungry proof-of-work coins. Metaverse invests in currencies that support virtual metaverse gaming and online real estate platforms. Decentralized finance focuses on the coins used by DeFi companies. Note that there is quite a bit of overlap between the portfolios.
Portfolios are subject to an annual advisory fee of 1% plus dealing charges, so it is not the most profitable investment method. However, it is one of the easiest ways to get into crypto using a trusted wallet designed by expert investors.
Limited investment risk capped at 5%
Betterment advises that users invest no more than 5% of assets in cryptocurrencies. This guardrail could do a lot to protect investors from the high risks associated with cryptocurrency assets while offering a diverse path to the markets.
Existing Betterment customers can access the crypto platform through their existing account and login. New customers need to sign up for a Betterment account, but do not need to invest in other Betterment products to use cryptocurrency wallets.
The bottom line
Betterment is arguably the first mainstream robo-advisor to enter the world of cryptocurrencies. Through its partnership with a major cryptocurrency exchange, Gemini, it will bring cryptocurrency to the masses. The new offering is a nice expansion for clients looking to diversify their investments in the digital asset space.
