Investment app Stash expands crypto access

Banking and investment platform Stash on Tuesday announced expanded cryptocurrency access for users through a dedicated crypto account for its 2 million users, with the ability to purchase eight cryptocurrencies including Bitcoin, Ethereum and Bitcoin Cash.

– We see this as an opportunity for growth [for users] to be able to invest and gain exposure to this growing asset class,” said Douglas Feldman, Stash’s Chief Investment Officer. “We have a very strong long-term view … that crypto and the blockchain technologies that crypto relies on will become more widespread.”

The announcement comes nearly a year after the company introduced crypto exposure in its managed Smart Portfolio accounts. Despite the volatility of the crypto market, buying crypto directly through Stash — a feature customers requested — is a long-term play to help users build wealth over time through diverse portfolios, Feldman said.

Stash is partnering with Apex Crypto, which will act as a custodian. Stash joins a growing number of traditional financial services expanding their reach into crypto this year. Fidelity Investments considered allowing individual investors to trade Bitcoin on its brokerage platform, The Wall Street Journal reported last month.

“We try not to focus on the downturns and focus on some of the longer-term indicators,” Tom Jessop, president of Fidelity Digital Assets, recently told The journal about the move.

The ability to buy crypto directly through Stash welcomes users who want a more hands-on approach to building their portfolios, said Claudio Esposito, senior vice president and chief product officer at Stash.

Stash said it advises users to make crypto a relatively small proportion of their asset mix, and offers a calculator tool and in-app alerts that advise when they have too much crypto exposure for their risk profile. Customers must also read through educational materials before investing in crypto, the company said.

While customers can buy crypto through the Stash platform, they will not be able to send crypto they buy through Stash to an external wallet. Stash said it’s open to enabling that feature in the future, but has no plans to do so right now. (Investment app Robinhood, by comparison, includes the ability to transfer crypto in and out of Robinhood crypto accounts and recently launched a non-custodial crypto wallet.)

The ability to buy crypto through Stash represents its first product offering new core system, which rolled out last month. The company is phasing out use of Green Dot’s core system, a move it said gives it more control over product offerings.

“When we started, we weren’t sure how much we were going to get into banking at that point, and the best thing for us to do was to have an all-in-one partner that provided everything we needed,” Esposito said. “As we’ve scaled and grown … we’ve wanted more control over the experience and more control over the infrastructure, and that’s just not the kind of offering that Green Dot has today.”

Stash, which is allegedly valued at $1.4 billion, it said it has $3 billion in assets under management and $125 million in annual revenue.

Adding crypto will help Stash with customer acquisition and retention, fintech industry analyst Grant Easterbrook said. For existing customers, crypto can be a tool to strengthen engagement within the platform as opposed to looking for these offerings elsewhere, he noted.

“Prospective customers often compare and contrast features when choosing a provider, and not offering crypto trading would become an increasingly important gap if Stash didn’t offer it,” he said.

While the educational tools can help introduce new clients to crypto, the inability to transfer crypto and out of the Stash platform could present challenges in the longer term, he said.

“The main centralized crypto exchange options that Stash clients can consider for crypto trading all offer the ability to send crypto in and out of their platforms,” ​​he said. “To be competitive in this industry, Stash will one day have to offer customers the ability to send crypto in and out.”