Betterment considering how to 'offer crypto’: Sarah Levy

Betterment CEO Sarah Levy joins 'Influencers with Andy Serwer' to discuss cryptocurrencies and the gamification of stock trading.

Video Transcript

ANDY SERWER: You guys are really benefiting from the meme stock frenzy. And I'd like you to talk about that a little bit more. It sort of is a sea change, right?

SARAH LEVY: Well, I think there are a lot of things happening, right? So this idea of democratizing finance has really been around nearly a decade. And we were pioneers in that idea, which was, you know, making investing much more accessible to the common investor.

I think what's new and what's happened, you know, in this most recent year is the removal of transaction fees, which has sort of heightened the speed of transaction, as well as the introduction of Mobile as a Platform, you know, where people can really be investing all day long from their pocket.

But I think one of the other things that's happened is really gamification. And that's something that I think is very attractive to investors, but is not always the best thing for investors.

And so, you know, we don't want to pass judgment on that. I think if people have disposable income that they're OK to lose, then they can feel free at the margin, you know, to sort of play the game, so to speak. But I think when we think about what makes the most sense for securing the long-term future of an investor, that's really where betterment plays.

And we think about retirement. And we think about, you know, what are the choices you can make now that can give you a better life long-term. And so our hope, and our research shows that it really is d that even those who are day trading are spending only about 30% of their dollars, you know, trading in that way, and 70% of what they're investing is really in long-term solutions, largely in ETFs, some mutual funds-- and that's really where we play, which is, you know, explaining to investors and helping them along the journey of a diversified kind of long-term outlook.

ANDY SERWER: You said last month, Sarah, that you're not ready to offer a cryptocurrency on the platform. Is that because you're skeptical of it as an asset or because it's too volatile? What's your thinking there?

SARAH LEVY: So I-- personally, I'm a big fan of crypto. And I think it's a really interesting asset class to add into the mix. And in particular, because it's counter-cyclical, there's an opportunity, really, to help your diversification plan with crypto.

But to your point, it is volatile. And a lot of what we do, you know, depends on, for example, tax-lost harvesting and things that can take advantage of that volatility. And so, you know, we know investors increasingly have an interest in crypto. And so what we're doing is really trying to figure out, is there a way that we can offer crypto with a guided wrapper so that we can help educate along the way?

And I think how that will manifest itself will be more through a lens of a long-term buy and hold the asset as a smaller portion of a portfolio rather than as sort of a trading opportunity short-term. And to the extent that we capture any value from volatility, I think that's more likely to be through tax-lost harvesting.