WealthSimple Crypto Review: From Robo-Advisor to a Crypto Seller

At one point, WealthSimple was one of the largest retail-focused fintech platforms in Canada. Today, the company is still best known for its trading and robo-advisor services, which allow customers to access commission-free stock trading and automated financial advice. However, in recent years, WealthSimple has been exploring the cryptocurrency market. The centerpiece of this strategy is WealthSimple Crypto, a federally regulated trading platform for popular cryptocurrencies, including Bitcoin, Ethereum, and Dogecoin.

To shed some light on the company’s dramatic pivot towards crypto assets, we’ve put together a brief guide to WealthSimple, including an analysis of its business model, its shift away from robo advisory services, and its evolution into a company that makes most of its money from selling cryptocurrencies.

Alternatively, for a more in-depth breakdown of WealthSimple’s crypto platform, check out this excellent WealthSimple Crypto review over at MillionDollarJourney.

What is WealthSimple?

Founded in 2014, WealthSimple is a Canadian investment management and financial technology company. Initially, WealthSimple’s core offering was its suite of easy-to-use and affordable passive investing tools, which encouraged investors to use the WealthSimple trading platform to build a diversified portfolio of low-cost index funds and ETFs. Over the years, WealthSimple has expanded its offerings to include more sophisticated saving, trading, and advisory services.

Today, WealthSimple’s conventional investing products are divided across two separate platforms: WealthSimple Invest and WealthSimple Trade. While WealthSimple Invest is still geared towards passive investing through low-cost ETFs and index funds, WealthSimple Trade has evolved into a more customizable, self-directed service, offering fractional shares, FX trading, and snap quotes across six different exchanges.

However, for many years, WealthSimple’s flagship product was WealthSimple for Advisors, a popular advisory service that allowed WealthSimple Invest customers to connect to both Canadian robo advisors and live advisors for portfolio allocation strategies, tax-saving advice, portfolio rebalancing suggestions, investment risk evaluations, and wealth management guidance.

Unfortunately, over the last five years, the market for robo-advisor platforms has seen a major decline in both consumer and institutional adoption. Many of the largest robo advisors (WealthSimple, Betterment, etc.) have experienced significant challenges navigating the regulatory environment. More importantly, ongoing pandemic-induced volatility in equity markets has shaken investor confidence in automated financial advice, with prominent investors criticizing the lack of transparency in decision-making and the depersonalized nature of algorithmic investment strategies.

Introducing WealthSimple Crypto

In light of the decreasing consumer appetite for robo advisory services, WealthSimple has re-evaluated and re-positioned its product offerings to take advantage of the growing demand for cryptocurrency trading services among retail investors.

In late 2020, WealthSimple Crypto was launched as Canada’s first federally-regulated cryptocurrency trading platform. Available to investors with WealthSimple Trade accounts, WealthSimple Crypto launched with only Bitcoin and Ethereum available for trading. However, the company has steadily expanded its crypto roster, with a focus on blue-chip altcoins like Cardano (ADA) and Polkadot (DOT) and popular community tokens like Dogecoin (DOGE) and Shiba Inu (SHIB).

As of January 2022, WealthSimple Crypto offers traders access to more than 30 different cryptocurrencies. With WealthSimple expected to continue to expand its cryptocurrency offerings, crypto-curious investors can take advantage of commission-free trading and $1 minimum deposit requirements.

While the WealthSimple Crypto platform is a step in the right direction for the company, there are a number of drawbacks to consider before investing any significant amount of capital in the nascent asset class. For starters, WealthSimple Crypto is still a relatively young trading platform, with limited liquidity and a relatively small number of active traders. This can lead to unfavorable price spreads for traders, especially those looking for fast execution.

Moreover, if you’re concerned about losing your capital in crypto assets, there are a few things to consider. Firstly, any cryptocurrencies you purchase through WealthSimple are held in custodial coverage by Gemini Trust. While Gemini’s cold storage insurance ensures that your assets are relatively safe from theft, investors will not possess thekeys to their crypto wallets, meaning they are technically unable to access their funds without the permission of Gemini.

Secondly, the broader cryptocurrency market is currently experiencing extremely high levels of volatility, with most major coins experiencing a significant downturn over the past week. For veteran cryptocurrency traders, this kind of volatility is an entirely normal (if not enjoyable) occurrence. However, for many WealthSimple customers, WealthSimple Crypto may be their first introduction to highly market-sensitive assets like cryptocurrencies. As a result, investors should be cognizant of the risks associated with cryptocurrency trading before committing any significant capital through WealthSimple Crypto.

The Bottom Line

While WealthSimple Crypto may not be the perfect introduction to cryptocurrency trading, it is an interesting example of a traditional financial services company exploring new revenue opportunities. In the meantime, investors should be wary of sinking substantial sums in WealthSimple Crypto without first familiarizing themselves with the relevant risks and opportunities of cryptocurrency trading.

Ultimately, while the WealthSimple Crypto platform may not be for every investor, it is definitely worth exploring for those who are looking to diversify their portfolio and invest in high-growth potential assets.

Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. No information in this article should be interpreted as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.