$25B investment firm adds ‘riskier’ Grayscale GBTC and ETHE for clients

Wealthfront users will now be able to have up to 10% of their portfolios composed of the Grayscale Bitcoin and Ethereum Trusts.

Bitcoin (BTC) and Ether (ETH) exposure has come to one of the world’s biggest automated investment firms.

In a blog post on July 29, Wealthfront, which has $25 billion in assets, confirmed that it had added two Grayscale funds to its suite of investment options.

GBTC buzz returns

The recent rise in cryptocurrency prices has kept institutional products such as Grayscale’s various funds in the spotlight.

Wealthfront, an example of a so-called “robo advisor” in the investments space, will now allow its clients exposure to the Grayscale Bitcoin Trust (GBTC) and Grayscale Ethereum Trust (ETHE).

“Buying cryptocurrency can feel intimidating — it takes time and effort to research all of the options, set up a wallet, and monitor an additional account. That’s why we’ve made it easy to get exposure to Bitcoin and Ethereum right in your Wealthfront portfolio, no wallets required,” the blog post explains.

“Instead of buying coins yourself, you can invest in GBTC and ETHE.”

Clients will be able to have up to 10% of their portfolio in Grayscale products, a limit the firm attributes to the “riskier and more volatile” nature of crypto products.

The move nonetheless reduces the ease-of-access dilemma faced by those interested in Grayscale’s funds, which are not always directly available, and place strict rules on shareowners.

Alongside Grayscale, meanwhile, Wealthfront increased its offering of exchange-traded funds (ETFs) from ARK Invest, itself a major GBTC stakeholder.

*ARK Invest’s GBTC holdings (purple). Source: Cathiesark.com*

What unlocking?

The announcement comes as institutional interest in Bitcoin in particular shows no signs of decreasing at prices around $40,000.

As Cointelegraph reported, exchange balances have fallen sharply this week, as over-the-counter (OTC) desks also see significant activity.

For its part, Grayscale has rid itself of a negative narrative surrounding unlocking of GBTC shares after the events had no perceptible impact on BTC price action.

Remember when all the traditional analysts said the Grayscale unlock would unleash billions in selling this last week? Yeah, no.

— Willy Woo (@woonomic) July 29, 2021

Its CEO, Michael Sonnenshein, this week reiterated a pledge to turn all Grayscale crypto funds into ETFs at the earliest opportunity, subject to regulatory changes in the United States.