- Acorns users can now allocate up to a maximum of 5% of their portfolio the ProShares Bitcoin Strategy (BITO) ETF
- The personal finance app has plans to create room for other cryptocurrencies in the future
Backed by Galaxy Digital, savings and investment firm Acorns has announced the introduction of Bitcoin exposure to its portfolio, targeting long-term investments among its users. Through a Twitter post, Acorns said that it is glad to add “Bits of Bitcoin” to diversify its portfolio.
With an increased rate of exposure to crypto among fintech firms, Acorns explained that it had to offer its investors the opportunity to diversify their holdings. The company cited the ‘low correlation’ between crypto and stocks as the rationale for the decision.
In contrast, though, at least at present, the correlation coefficient shows Bitcoin has been moving largely in sync with the S&P 500 and the Nasdaq 100.
How it will work
Users will gain exposure through the ProShares Bitcoin Strategy ETF. The firm will customise portfolios and set the guidelines dependent on the user investment profile, which consider a few factors about the investor, such as their age, income, and goals.
Acorns revealed it intends to add exposure to other forms of cryptocurrency in the future.
“As people choose to customise their portfolios with us in the future, we will give them the option in time to add other cryptocurrencies to the degree that they want,” Acorns Chief Investment Officer Seth Wunder confirmed.
Crypto exposure and education for long term investing
According to a Twitter thread by fintech writer Nicole Casperson, Acorns CEO Noah Kerner explained that even with the company’s move into crypto, it holds a strong position against the gambling mentality associated with crypto trading.
Acorns is cautious in its decision, and the upper limit of 5% investment in the Bitcoin ETF is to protect the financial wellness of its 4.6 million users. The firm is essentially restricting its scope to just providing exposure to Bitcoin and educating users seeking to diversify their portfolios.
“There’s a gambling epidemic in America. We’re giving our customers crypto exposure and education for long-term investing,” he said.
With $12.5 billion worth of assets under its management as per the latest market data, the fintech firm, which has historically specialised in micro and passive investing, has become the latest big name, itching to get a taste of this crypto.
The launch follows a recent fundraise where it raised $300 million in a Series F round, having binned plans to go public. The firm’s foray into crypto reflects the changing needs of investor demands. Notably, they – now more than ever – want to have control and decision making over their investments.