Wealthfront is embracing crypto. Is there a safe way to invest?

"We want to do it in a way that helps clients, as opposed to gambling," says co-founder Dan Carroll.

Wealthfront co-founder Dan Carroll

Wealthfront co-founder Dan Carroll isn't worried about his firm's move into crypto.

Photo: Wealthfront

Wealthfront co-founder Dan Carroll typically describes the company's investing approach as focusing on carefully considered financial goals, "as opposed to gambling."

Launched in 2008 at the height of the financial crisis, Wealthfront now has more than 440,000 clients and manages more than $25 billion in assets thanks to its role as a pioneer in the use of roboadvisor investing software.

It also became famous for encouraging clients to embrace a long-term, conservative approach to investing. So it wasn't surprising that when bitcoin and other cryptocurrencies hit the scene, Wealthfront didn't rush to offer the volatile and risky assets.

That's about to change.

Wealthfront announced in late April that it has begun exploring cryptocurrencies as an investment option for clients. Though Carroll said Wealthfront came to the decision on its own, it comes at a time when crypto has become more widely accepted, highlighted by the successful public-market debut of crypto marketplace Coinbase.

In an interview with Protocol, Carroll, now the company's chief strategy officer, talked about why Wealthfront decided to embrace crypto investing and how it fits into the company's wealth management philosophy.

This interview has been edited for clarity and brevity.

How did you reach the decision to add crypto to the Wealthfront platform?

What we noticed was clients are getting more and more interested in the markets. At this time in the pandemic, everyone was home. There was a stock-trading craze. The interest in the market is really at an all-time high, and Wealthfront can really add value to this.

Wealthfront is a fiduciary so we have to do what's in your best interest. Where some of these young folks may be interested in the stock market, and they go on some of these gambling platforms to buy stocks or buy AMC, Wealthfront actually has to do what's in your best interest. So, as we add more options, such as crypto, to the platform, we do it in a way that's in your best interest.

The core Wealthfront classic portfolio that we recommend to clients won't likely offer crypto. But the clients can customize their portfolio based on their goals and where they want to go in life. They can choose to add different securities and ETFs and later crypto to their portfolio. We saw this interest and the knowledge being there and we thought, "Well, Wealthfront is the best fiduciary that's positioned to actually guide people to do what's best, where they can dip their toe into something like crypto, but do it in a responsible way."

You were founded in 2008, when bitcoin was literally just a white paper. How did your view of cryptocurrencies evolve?

We believe that the best way to build long-term wealth is in a diversified portfolio, low-cost index funds over a long period of time. We want to give clients the ability to invest in what they believe in, whether that's socially responsible, whether that's crypto and stuff of that nature. As new kinds of investing trends hit the market, we don't need to be first. As something newer like crypto [emerges], we're heads-down trying to do what's in the clients' best interest and let that market develop. A decade later, as it's become more accepted, we're at the point where we can make recommendations, where we can help people manage the risk and add crypto to their portfolios. But we don't need to be trailblazers in that regard.

How did your team discuss the pros and cons of adding crypto?

As a fiduciary, as we offer something like crypto, it's likely that there would be some type of limit to how much you can have in your portfolio. The discussions at Wealthfront, as we launch into this exploratory phase, are around what exposure do we offer clients, whether they can have 10% in crypto and something like that. Many on the team [with] their own Coinbase accounts were super interested in crypto. The interest among our employees is really high. Doing it in a way that can actually help clients and not be gambling, we're super interested in.

What currencies are going to be added? Are you adding Bitcoin?

We're in the exploratory phase, so we haven't announced the partnership that we're having, or the exact coins that we're offering. What we had said is, it's likely that we'd offer Bitcoin and [Ether]. Any details outside of that, you know, we don't have anything to announce.

How are you tackling this change, given the volatile nature of these assets?

We have a team of Ph.D.s in our investment team. There are different volatilities in different asset classes. You can imagine that the volatility of something like crypto would be higher than, let's say, the volatility of something like U.S. stocks. Given that, it will have a different place in the diversified portfolio than, say, U.S. stocks. As stuff is more volatile, it's likely it's going to be a lesser percentage of your portfolio.

We offer you a recommended portfolio based on your risk. As they add securities to their portfolio and access to something like crypto, we will show them how their risk changes. Let's say that your risk score is seven and you now want to own an innovation ETF and have some type of access to crypto, and now, your risk score is eight — we will let you know. "Hey, Ben, your risk is going to increase by doing this. Are you OK with that?" So we'll guide clients in that regard.

How do you view the trend of crypto ETFs?

There's a lot of crypto ETFs that are in the [regulatory] pipeline. They haven't been approved yet. We would welcome that. We want to be able to provide low-cost products to our clients and so any products that are good products that can lower the cost of crypto we would welcome.

How did recent developments in crypto, such as the Coinbase IPO or the rise of Dogecoin, impact this decision?

They didn't play a role. I mean, it is fun watching Elon Musk tweeting about Dogecoin, [but] it played no role in offering [crypto] to Wealthfront clients. It's more the demand.

Has Dogecoin been mentioned as a possible addition?

Not at this time.

Why not?

I don't know. You tell me.

Do you invest in crypto, Dan?

I do. Very small amounts.


Bitcoin, yes. I haven't actually done it in a while. It's been a couple years but I do remember buying it at $500 and selling it at $1,800 and that was about it. I haven't played with it in years.

What are your worst fears about this move?

I don't have fears.

That's another way of asking: How do you prepare for the unexpected?

We think in terms of decades and not years when it comes to asset-class returns. You know one asset class is hot, the other is not, and that's why you have rebalancing. We think in terms of asset-class returns in terms of decades. If it's a part of a diversified portfolio and it's a small part of a diversified portfolio, sometimes it's going to help, but sometimes it's going to hurt over a long period of time. We think that we can do it in a responsible way where clients can still reach their goals and have access to crypto. We just want to do it in a way that actually helps clients reach goals as opposed to gambling.

Speaking of gambling, retail investing recently was in the spotlight with the GameStop and Robinhood trading frenzy. How do you reflect on that controversy?

One of the benefits of the recent focus on the market is there's 130 million millennials and Gen Z out there that have an interest in investing that they may not have had before. For young, first-time investors in the stock market, they are getting into it from the meme level. But a lot of them are realizing, "You know, this gambling thing isn't for me." From our perspective, an awareness perspective, this is great for Wealthfront. A lot of people will try their hand at buying the AMCs of the world and the GameStops of the world and realize, "You know, maybe this was fun with my play money, but I kind of want to get serious and I just got burned." A long-term option like Wealthfront actually is in your best interest.

What are you most worried about in fintech, specifically the space you're in, investing?

I think it's the exact opposite. What we're actually seeing is a golden age in fintech. It's never been a better time to be a consumer. If you think about the past decades, we haven't seen any banking innovation since the ATM. Now we have a lot of these new fintech companies, and they're building great product experiences on your phone. The Charles Schwabs, the Merrill Lynches and the Vanguards of the world built their businesses and their brands off the backs of the baby boomers. I think you're gonna see the same thing, storied franchises and huge brands built and growing with the millennials and Gen Z over the next decades to come.


New Jersey could become an ocean energy hub

A first-in-the-nation bill would support wave and tidal energy as a way to meet the Garden State's climate goals.

Technological challenges mean wave and tidal power remain generally more expensive than their other renewable counterparts. But government support could help spur more innovation that brings down cost.

Photo: Jeremy Bishop via Unsplash

Move over, solar and wind. There’s a new kid on the renewable energy block: waves and tides.

Harnessing the ocean’s power is still in its early stages, but the industry is poised for a big legislative boost, with the potential for real investment down the line.

Keep Reading Show less
Lisa Martine Jenkins

Lisa Martine Jenkins is a senior reporter at Protocol covering climate. Lisa previously wrote for Morning Consult, Chemical Watch and the Associated Press. Lisa is currently based in Brooklyn, and is originally from the Bay Area. Find her on Twitter ( @l_m_j_) or reach out via email (

Every day, millions of us press the “order” button on our favorite coffee store's mobile application: Our chosen brew will be on the counter when we arrive. It’s a personalized, seamless experience that we have all come to expect. What we don’t know is what’s happening behind the scenes. The mobile application is sourcing data from a database that stores information about each customer and what their favorite coffee drinks are. It is also leveraging event-streaming data in real time to ensure the ingredients for your personal coffee are in supply at your local store.

Applications like this power our daily lives, and if they can’t access massive amounts of data stored in a database as well as stream data “in motion” instantaneously, you — and millions of customers — won’t have these in-the-moment experiences.

Keep Reading Show less
Jennifer Goforth Gregory
Jennifer Goforth Gregory has worked in the B2B technology industry for over 20 years. As a freelance writer she writes for top technology brands, including IBM, HPE, Adobe, AT&T, Verizon, Epson, Oracle, Intel and Square. She specializes in a wide range of technology, such as AI, IoT, cloud, cybersecurity, and CX. Jennifer also wrote a bestselling book The Freelance Content Marketing Writer to help other writers launch a high earning freelance business.

Watch 'Stranger Things,' play Neon White and more weekend recs

Don’t know what to do this weekend? We’ve got you covered.

Here are our picks for your long weekend.

Image: Annapurna Interactive; Wizard of the Coast; Netflix

Kick off your long weekend with an extra-long two-part “Stranger Things” finale; a deep dive into the deckbuilding games like Magic: The Gathering; and Neon White, which mashes up several genres, including a dating sim.

Keep Reading Show less
Nick Statt

Nick Statt is Protocol's video game reporter. Prior to joining Protocol, he was news editor at The Verge covering the gaming industry, mobile apps and antitrust out of San Francisco, in addition to managing coverage of Silicon Valley tech giants and startups. He now resides in Rochester, New York, home of the garbage plate and, completely coincidentally, the World Video Game Hall of Fame. He can be reached at


Debt fueled crypto mining’s boom — and now, its bust

Leverage helped mining operations expand as they borrowed against their hardware or the crypto it generated.

Dropping crypto prices have upended the economics of mining.

Photo: Lars Hagberg/AFP via Getty Images

As bitcoin boomed, crypto mining seemed almost like printing money. But in reality, miners have always had to juggle the cost of hardware, electricity and operations against the tokens their work yielded. Often miners held onto their crypto, betting it would appreciate, or borrowed against it to buy more mining rigs. Now all those bills are coming due: The industry has accumulated as much as $4 billion in debt, according to some estimates.

The crypto boom encouraged excess. “The approach was get rich quick, build it big, build it fast, use leverage. Do it now,” said Andrew Webber, founder and CEO at crypto mining service provider Digital Power Optimization.

Keep Reading Show less
Tomio Geron

Tomio Geron ( @tomiogeron) is a San Francisco-based reporter covering fintech. He was previously a reporter and editor at The Wall Street Journal, covering venture capital and startups. Before that, he worked as a staff writer at Forbes, covering social media and venture capital, and also edited the Midas List of top tech investors. He has also worked at newspapers covering crime, courts, health and other topics. He can be reached at or


How lax social media policies help fuel a prescription drug boom

Prescription drug ads are all over TikTok, Facebook and Instagram. As the potential harms become clear, why haven’t the companies updated their advertising policies?

Even as providers like Cerebral draw federal attention, Meta’s and TikTok’s advertising policies still allow telehealth providers to turbocharge their marketing efforts.

Illustration: Overearth/iStock/Getty Images Plus

In the United States, prescription drug advertisements are as commonplace as drive-thru lanes and Pete Davidson relationship updates. We’re told every day — often multiple times a day — to ask our doctor if some new medication is right for us. Saturday Night Live has for decades parodied the breathless parade of side effect warnings tacked onto drug commercials. Here in New York, even our subway swipes are subsidized by advertisements that deliver the good news: We can last longer in bed and keep our hair, if only we turn to the latest VC-backed telehealth service.

The U.S. is almost alone in embracing direct-to-consumer prescription drug advertisements. Nations as disparate as Saudi Arabia, France and China all find common ground in banning such ads. In fact, of all developed nations, only New Zealand joins the U.S. in giving pharmaceutical companies a direct line to consumers.

Keep Reading Show less
Hirsh Chitkara

Hirsh Chitkara ( @HirshChitkara) is a reporter at Protocol focused on the intersection of politics, technology and society. Before joining Protocol, he helped write a daily newsletter at Insider that covered all things Big Tech. He's based in New York and can be reached at

Latest Stories