In brief

  • Raiz, a 4-year-old investment app in Australia with 215,000 monthly active users, is launching a portfolio with 5% Bitcoin allocation.
  • The other 95% of the portfolio will hold high-cap stocks, ETFs, and Australian corporate debt.
  • Gemini will custody the Bitcoin allocated in the Sapphire portfolio.

An up-and-coming investing app in Australia now includes Bitcoin in one of its portfolios.

Raiz Invest’s new Sapphire portfolio includes a 5% allocation into Bitcoin, according to a company blog post. The other 95% of the micro-investing platform’s seventh portfolio will include “US, Australian, European, and Asian large-cap stocks, as well as the Australian corporate debt and money markets, all via exchange-traded funds (ETFs).” Gemini, the crypto exchange and custodian founded by Tyler and Cameron Winklevoss, will custody the Bitcoin in the portfolio.

This Bitcoin allocation, while small at 5%, seems to give credence to the idea that investors are increasingly viewing Bitcoin as a hedge asset. 

Positioned as it is alongside equities and even corporate debt, “digital gold” sure does stick out as the black sheep of the group. This small allocation, however, falls in line with hedge fund luminary Paul Tudor Jones (among other legacy investors, like Chamath Palihapitiya) recommending that investors allocate 1-2% into Bitcoin as a hedge against monetary inflation). 

Bitcoin as a hedge aside, part of the company’s strategy for launching its Sapphire Portfolio, is based in part on the notion that younger generations have an appetite for cryptocurrencies. Citing a Charles Schwab survey from November 2019, Raiz Invest wants to cater to millennials who, per the Charles Schwab research, were vastly more inclined towards Bitcoin and other digital assets than their Boomer and Gen-X counterparts, who are privy to traditional investments.

Founded in 2016, Raiz Invest services users in Australia and Indonesia and provides micro-investing exposure to large-cap stocks, indices, ETFs and other investments. The fin-tech fledgling currently services 215,000 monthly users, has $375 million funds under management, and pulled in just over $6 million in revenue in 2019 (double the prior year’s inflows), according to information from the Australian Securities Exchange.

With the Sapphire Portfolio and the addition of Bitcoin to its assets under management, Raiz Invest will leverage Gemini’s custody services. The Winklevoss owned exchange is one of the most buttoned-up spots in the industry to buy Bitcoin on spot. Its status as a full-fledged, regulated entity and the company’s custody services made Gemini a perfect fit for Raiz, according to the blogpost, which touts Gemini as “one of the safest cryptocurrency exchanges and custodians in the world.”