This guide provides a step-by-step process to buy crypto with Wealthfront’s investment platform. We’ll cover Wealthfront’s approach to crypto, fees involved, limitations, and alternatives for more extensive crypto exposure.
Summary:
Wealthfront currently limits crypto investments to 10% of a portfolio through cryptocurrency trusts instead of direct purchases. This conservative stance caters more towards traditional investors versus individuals looking to deeply diversify into digital assets. While Wealthfront offers a trusted and regulated environment, those wanting more crypto assets may consider platforms like Kraken instead. Kraken is a US-based, FinCEN-compliant exchange offering over 200 cryptocurrencies with competitive fees starting at 0.16%.
When deciding on a platform, weigh aspects like regulatory compliance, fees, and asset diversity. Though Wealthfront limits crypto, its automated investing and cash management solutions serve immediate and long-term financial goals smoothly.
Step-by-Step guide on how to buy Crypto with Wealthfront
Wealthfront restricts direct crypto investing, only allowing crypto trusts like GBTC and ETHE up to 10% of a portfolio. To directly purchase cryptocurrencies, we recommend Kraken exchange for its regulatory compliance, low fees, and extensive offerings.
Step 1: Visit Kraken.com to create an account and complete identity verification.
Step 2: Hover over Funding and select Deposit to add money to trade cryptos. Choose deposit method – ACH transfers are free.
Step 3: Finalize deposit amount in USD through selected payment method.
Step 4: Use deposited funds to buy from 200+ cryptos. Execute trade through Spot or Margin markets.
Though exchanges have varying verification processes, the crypto purchase process remains similar across platforms.
What is Wealthfront’s status on cryptocurrencies?
Wealthfront avoids direct crypto exposure beyond 10% in a portfolio to limit risk. Assets available include trusts like GBTC for Bitcoin and ETHE for Ethereum. The approach caters more towards traditional investors rather than extensive crypto traders.
Does Wealthfront work with crypto?
Given the cautious stance, Wealthfront seems unlikely to expand direct crypto offerings soon. The 10% portfolio restriction via trusts aims to reduce volatility risk, indicating the platform will maintain its conservative approach for now.
What do I do if Wealthfront is not crypto friendly?
For more crypto assets, Kraken is a good US-based alternative. To use Kraken, first create an account with email and password. Then provide proof of identity and residential address. Once verified, deposit USD through various free/paid methods and use funds to directly buy cryptos.
Or, open an account at a crypto-friendly bank to seamlessly connect with platforms like Kraken later. Research banks with crypto exchange partnerships to find one better suited to your needs.
Conclusion:
Wealthfront positions itself as a trusted platform but limits crypto due to its volatility. To directly invest in cryptocurrencies, Kraken emerges as a regulated US alternative with low fees and extensive coins to choose from. Evaluating aspects like compliance, costs, and asset offerings will help decide the right platform for your crypto investments.
FAQs
Can you trade on Wealthfront?
No, Wealthfront does not currently allow trading of assets within its platform. It offers automated investing solutions rather than active trading.
Is my money safe with Wealthfront?
Yes, Wealthfront offers robust security measures to keep your money and data safe. Client assets held with Wealthfront Brokerage are covered by SIPC insurance up to $500,000.
Can I buy ETF on Wealthfront?
Yes, Wealthfront allows you to purchase a variety of ETFs across sectors, categories, and risk levels to build a diversified portfolio suited to your goals.
What happens if Wealthfront goes out of business?
As a SIPC member, Wealthfront provides insurance on cash and securities in client accounts up to $500,000 (including $250,000 for cash). So accounts would remain protected up to those limits if Wealthfront went out of business.
