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 Betterment balance in digital currencies like Bitcoin, Ethereum, and other popular currencies. The news comes on the heels of Betterment's partnership with crypto exchange Gemini to offer crypto portfolios.
- Betterment now offers automated cryptocurrency investing through its platform.
- Customers can invest up to 5% of their assets into a cryptocurrency portfolio.
- Cryptocurrency exchange Gemini acts as the custodian of Betterment cryptocurrency investment products.
Betterment Offers New Automated Cryptocurrency Investment Product
Betterment's new offering, Crypto for Betterment, has customizable portfolios offering curated selections of digital assets. Investors can choose between four crypto portfolios: Universe, Sustainable, Metaverse, and Decentralized Finance. Each portfolio focuses on different genres of cryptocurrency assets.
The Universe portfolio holds over two dozen different currencies from popular projects. Sustainable invests only in currencies that use less power than the notoriously energy-hungry Bitcoin and other proof-of-work currencies. Metaverse invests in currencies that support virtual metaverse games and online real estate platforms. Decentralized Finance is focused on currencies utilized by DeFi companies. Note that there is quite a bit of overlap between portfolios.
Portfolios are subject to a 1% annual advisory fee plus trading expenses, so it’s not the most cost-effective investment method. However, it is one of the easiest ways to get into crypto using a trusted portfolio designed by expert investors.
Limited Investment Risk with 5% Cap
Betterment advises that users shouldn’t invest more than 5% of assets in crypto. This guardrail could do a lot to protect investors from the high risks associated with cryptocurrency assets while offering a diverse path into the markets.
Current Betterment customers can access the crypto platform through their existing account and login. New customers have to sign up for a Betterment account, but they don’t need to invest in Betterment’s other products to use the cryptocurrency portfolios.
The Bottom Line
Betterment is arguably the first mainstream robo-advisor to enter the crypto world. Through its partnership with a major crypto exchange Gemini, it will bring crypto to the masses. The new offering is a good expansion for customers looking to diversify their investments in the digital asset space.