As bitcoin soars to new highs and curiosity around investing in the notoriously volatile cryptocurrency grows, Wealthsimple is letting Canadians buy-in through a workplace group retirement savings program.
Employers who use Wealthsimple Work for their group retirement plans can let their employees put up to three per cent of their money into bitcoin and ethereum ETFs. Wealthsimple acknowledges cryptocurrency investing is risky, hence the cap. The allocation will be automatically adjusted and Wealthsimple will decide the bitcoin and ethereum weights.
“If crypto prices skyrocket, retirement portfolios will automatically rebalance and reallocate your gains into more stable investments like stocks and bonds,” Wealthsimple CIO Ben Reeves, told Yahoo Finance Canada.
“On the other hand, if the crypto price falls, we will not sell other assets to buy crypto. We would only allocate deposits in proportion to the target allocation.”
Reeves says Wealthsimple Work will use an algorithm to decide the best ETFs based on factors like tradings spreads and management fees.
Wealthsimple says hundreds of employers use Wealthsimple Work. It’s up to employers to decide if they want to opt into cryptocurrency investment.
“While there may be some employers that feel a crypto portfolio won’t resonate with their workforce, we also know that millions of Canadians are investing in crypto, and many more are considering it,” head of Wealthsimple Work Tim Kalimov told Yahoo Finance Canada.
‘We expect the majority of employers will be excited to offer a crypto option as part of their benefits package.”
'You won't go broke'
Personal finance columnist Rubina Ahmed-Haq says it's an interesting marketing move. Wealthsimple encourages employees to get their employers on board, a move Ahmed-Haq calls "sales-y", but she likes the allocation limit.
"Holding crypto in 1-3 per cent of your retirement is not a bad strategy. You won't go broke if cryptocurrency doesn't take off, and if it does you will make some extra money for your retirement years," personal finance columnist Rubina Ahmed-Haq told Yahoo Finance Canada.
"I think the 1-3 per cent target is a good one for anyone wanting to invest in something risky, it could be crypto, or weed stocks, or any emerging market we don't know much about. If you find it interesting don't dedicate more than three per cent to make sure you are protecting the majority of your portfolio with more conservative investments."
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.