Wealthfront cedes to four years of investors clamoring for crypto by taking on expensive third-party vendor that Betterment rules out | RIABiz

The Redwood City, Calif., robo-advisor turned a hard 'no' into a soft 'yes' by dealing with Grayscale and its 200 basis-point-plus fees, which its robo rival in NYC -- also without a crypto path -- finds ludicrous.

Wealthfront came to a fork in the road with two bad options -- denying access to cryptocurrency or providing access outside its low-price, ETF-reliant paradigm. It chose the latter for up to 10% of an investor's holdings.

The Palo Alto, Calif., robo-advisor announced in a company blog post, Jul. 29 it will let retail investors trade two Grayscale mutual funds: The Grayscale Bitcoin Trust (GBTC) and the Grayscale Ethereum Trust (ETHE).

Graycale Investments LLC, based in Stamford, Conn., is engaged in an all-in push to convert its mutual fund to an ETF, and last week it even hired an ETF unit chief -- despite having no exchange traded funds.

Wealthfront declined an interview or to respond to emailed questions including whether it had considered adding direct crypto trading capabilities, or whether its fully discretionary portfolios would hold crypto assets by default. Nor did it address GBTC's sustained low valuation in relation to Bitcoin.

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