Introducing Smart Portfolios with Cryptocurrency Exposure

At stash we understand that markets and market conditions are constantly changing. And whether it’s the challenges posed by current inflation, the rapid pace of technological development, or understanding new types of investments like cryptocurrencies, stash wants to help you face those changes with confidence.

so we are happy to announce that we will be adding cryptocurrency trusts to our smart wallet*. smart portfolio is a new type of managed account, introduced earlier this year, that can help take the guesswork out of building a diversified portfolio.

Reading: Bitcoin on stash

The Smart Portfolio doesn’t load too much into one type of investment or too few sectors, which can be critical to weathering market volatility and achieving your long-term financial goals.

is a personalized portfolio that stash’s investment committee of financial experts developed and recommended for you based on your risk profile. and stash actively monitors and manages the account for you, automatically rebalancing to keep your projected investment allocation current.

smart wallets with cryptocurrencies

we will give you access to cryptocurrencies exclusively through a smart wallet, and we are doing so now because we are confident that more mature digital currencies, such as bitcoin and ethereum, have long-term growth potential and significant benefits from the diversification. here’s the thing, we’re not making the changes based on investment fads, or because we think it’s fashionable. our investment committee believes that cryptocurrency is now mature enough as an asset class to fit into smart portfolios, just as bonds, gold, or other commodities can be smart choices for your total diversification plan.

Primarily, we will use cryptocurrency trusts as a substitute for a small part of the bond holdings in your smart wallet. While bonds remain an important part of balancing risk in your portfolio, the current economic environment, including inflation and the potential rise in interest rates, may affect their performance. we believe that cryptocurrency may have unique strengths against inflation, which can eat into your portfolio’s returns over time in the same way that it reduces the purchasing power of your cash.

leader in investment in cryptocurrencies

See also: Can Bitcoin Be Seized? | River Financial

stash will allow you to invest in cryptocurrencies through funds offered by grayscale, the world’s largest digital currency asset manager. The company manages over $35 billion in crypto assets and is a pioneer in offering crypto exposure through funds.

When you invest in your smart wallet, you will not invest directly in cryptocurrencies. Instead, you’ll buy shares of something called a Delaware Statutory Trust (DST). A DST is essentially a regulated investment company, similar in structure to a mutual fund or ETF, that pools cash from investors and streamlines the investment process. and will give you exposure to cryptocurrencies without the challenges of trading, storing, or protecting individual coins or tokens.

so, we will add two dsts to the smart wallet. The first is called Grayscale Bitcoin Trust (GBTC), which offers investors Bitcoin exposure through shares of DST. we will add an equal amount of grayscale ethereum trust (ethe), which offers investors exposure to ethereum via dst shares.

If you want to learn more about cryptocurrencies as an asset and the delaware trusts we have chosen, you can learn more here and here.

risks of delaware cryptocurrencies and legal trusts

Putting money into the market involves risk and you can always lose money when you invest. Cryptocurrency is a particularly volatile asset, meaning that it is subject to short-term price fluctuations (up and down) that are generally much more dramatic than those experienced by stocks and bonds. Additionally, due to the uniqueness of the DST structure, the value of GBTC and ETHE shares may change at a different rate than the price changes in Bitcoin and Ethereum. that does not mean that the value of the actual coins inside the trusts does not follow the price of the coins.

Good to know: Despite cryptocurrency price volatility, the digital currency has shown remarkably low correlations with other asset classes in the smart wallet. This means that they generally do not move in the same direction as the other assets and, when added in small amounts to the diversified portfolio, can actually work to decrease overall volatility.

how smart wallets will change

See also: How Bitcoin revived Greenidge Generation, a coal plant on Seneca Lake | Grist

As a reminder, when you signed up for stash, we asked you a few questions about your investment style and financial circumstances. We use this information to place you into one of three risk profiles: conservative, moderate, and aggressive. The information you provided also helps us calculate your risk tolerance and investment time horizon. When you sign up for Smart Portfolios, we will place you in the portfolio that is designed for the overall risk tolerance you select. (all you have to do is deposit money, a minimum of $5, into the account and stash does the rest).

this is what it means:

Investors with a

  • conservative risk profile prefer stability, even if it means smaller gains, but may still want some growth potential for their portfolio. These investors will generally have more bonds, which tend to be less risky, in their portfolios than aggressive or even moderate investors. they may need your money sooner rather than later and cannot bear additional risks. Or they may be closer to their financial goals and don’t need to take as much risk to increase their wealth. investors with a
  • moderate risk profile seek to build stable portfolios, but may also have the ability to take on a little more risk in exchange for potentially higher long-term growth. their portfolios may have slightly more exposure to stocks than bonds. investors with an
  • aggressive risk profile may be looking to maximize their portfolio’s long-term growth potential, even if it means sacrificing some stability and incurring a higher risk. These investors may hold more stocks in their portfolios than bonds. An aggressive risk profile may be suitable for someone with a longer investment horizon and more need for investment growth, as well as someone who doesn’t need to dip into their account regularly for cash for routine things.

We will not put a large percentage of any of the wallets into digital currency. if you are a conservative investor, your target exposure to cryptocurrencies will be around 4%, while moderate and aggressive investors will have around 5% and 6% exposure, respectively.

a feature of your smart wallet is periodic rebalancing. rebalancing is the process that keeps portfolio components aligned with the intended risk-based portfolio mix.

stash designed each Smart Portfolio with a different target allocation of investment categories based on an investor’s risk profile. Depending on how the underlying investments move over time, an investor’s actual portfolio allocation may drift away from its target. in that case, the portfolio may need to be rebalanced by selling some overweight investments and buying some underweight ones to get back on track.

a new look

In addition, we’re changing the way we present Smart Portfolios in the app to include more information about your individual investments. Not only do you get a centralized view of your investments, but you can click on each category to get a quick summary of what it includes and what percentage of your portfolio it makes up.

Smart Portfolios and the Stash Way

Smart Portfolios also align with The Hidden Way, our investment philosophy, which includes investing regularly, thinking long-term, and diversifying to minimize risk. our investment team believes that cryptocurrency can help you further diversify. With smart wallets, you can invest regularly without having to make decisions about where your money should go. smart portfolios can also free you from worrying about short-term volatility by making sure you meet your long-term financial goals.

See also: Top 7 Best Bitcoin Games, Tested and Reviewed for 2022

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