Investment app Acorns catches crypto bug, adds bitcoin exposure

Investment app Acorns has added the option for its user to invest up to 5% in BTC via their investment accounts.

Acorns is an investment fintech that popularized the feature to invest spare change into prebuilt portfolios along with banking services such as a checking account. 

According to the announcement, the Galaxy Digital-backed company says that it implemented the feature as their 4.6 million subscribers expressed interest in cryptocurrencies. CEO of Acorns Noah Kerner, however, stressed that it is "not trading" and instead is a way for customers to invest in a volatile asset as part of a long-term diversified portfolio. 

Acorns will not allow users to purchase bitcoin directly, but rather gain exposure via ProShare's Bitcoin futures exchange-traded fund. 

“We believe in opening access to invest the right way, responsibly for the long term," said Acorns chief investment officer Seth Wunder. "Adding a small allocation of bitcoin exposure to a diversified portfolio is the perfect way to introduce everyday Americans to the asset class.”

In an interview with The Block, Wunder said that the company's move into crypto reflects the changing financial demands of investors following the COVID-19 pandemic. In Wunder's view, investors want to be more actively involved in their investment decisions than before and expand outside of cooking-cutter portfolios. That's evident in the number of brokerage accounts that have opened in the wake of the pandemic and various government-enforced lockdowns. 

To meet these new needs, Acorns also plans to offer customizable portfolios and the ability to invest in individual stocks.

"You have to meet them where they are," said Wunder, who took on the position of CIO about six months ago. "Society went through a pendulum swing...will the same fervor in investing exist when we move past the pandemic, maybe?"

He added:

"Our job is to make sure our customers have the best assets to invest in in the best risk-adjusted framework. When you look at bitcoin it has 10 years of history under its belt and five years of a real trading framework."

Acorns join a growing list of fintechs that have caught the crypto bug.

Earlier this month, Nordic neobank Lunar announced it was rolling out crypto tools alongside a $77 million raise. The UK's Revolut has long offered crypto investment tools and is said to be exploring a native token. Germany's N26 is also reportedly due to launch a crypto trading tool through a partnership with Bitpanda.

In the US, robo advisers have entered the market, with Betterment acquiring a crypto portfolio service earlier this year. Wealthfront, which was acquired by investment banking and wealth management firm UBS, also allows its clients to access crypto exposure. 

Founded in 2012, Acorns manages more than $12.5 billion. Most recently, the fintech firm abandoned its SPAC plans in favor of a $300 million raise led by private equity firm TPG.