Savings app unicorn Acorns is adding Bitcoin exposure to portfolios. Here’s the catch

And by “they” I mean all the brokerages that have been lining up to offer it to customers. Nearly every app that caters to young investors offers Bitcoin now, and sometimes Ether and other cryptocurrencies, too: Robinhood, Public, SoFi, WeBull—you name it.

But today, long-term savings and investing unicorn Acorns is joining the fray, and it feels a bit different this time around.

Acorns, the Irvine, Calif.-based fintech that allows people to invest their spare change, said this morning that it would add optional Bitcoin exposure to its portfolios—permitting its more than 4.6 million users to invest up to 5% of their portfolios in the ProShares Bitcoin Strategy ETF, also known as BITO. (An ETF that invests directly in Bitcoin hasn’t been approved yet by the Securities and Exchange Commission, so BITO invests in Bitcoin futures and some other holdings like money market instruments).

The benefits were clear to Acorns’ investment team, Chief Investment Officer Seth Wunder tells me. Bitcoin and other cryptocurrencies behave differently than the traditional stock and bond markets, so it can act as a diversifier to an overall portfolio. 

“You can construct portfolios that will have lower, more diversified risk over the long-term, even by adding a singular asset that might itself be risky,” Wunder tells me. “And that was the analysis that we went through, and also why we think it’s the right way to invest in Bitcoin—to make sure that you’re adding bits of Bitcoin over time.”

Bitcoin has been around for 13 years, and its market cap has hit $1 trillion (though it’s currently just over $800 billion). The BITO ETF is an investment that trades on an exchange, so it is highly liquid and is a regulated investment product. Besides, 40% of Acorns customers said they were interested in investing in crypto.

But here’s the thing: While it’s initially only available to Acorns brokerage accounts, the company says it will eventually roll this out to retirement accounts as well, although it won’t specify a timeline. Read: Acorns customers will get to start putting their retirement savings into crypto.

Everyone acknowledges that cryptocurrencies are inherently risky. I mean—all investing coincides with some degree of risk. But crypto is different. Cryptocurrencies are still only about 13 years old, compared to the U.S. stock market that offers more than 200 years-worth of data to track, analyze, and predict. 

Crypto is the most volatile asset class on the market, and it’s largely unregulated—even if President Joe Biden recently signed an executive order to get the ball rolling. But don’t take my word for it: New disclosures on Acorns’ website describe BITO as a “high-risk investment” and Bitcoin and Bitcoin futures as “relatively new.”

If you read down a bit further, here’s another line: “An investor should be prepared to lose the full principal value of their investment suddenly and without warning.” 

But if we’re talking about retirement savings, I find that line a little jarring. The Labor Department seems to as well. Just recently, the DoL put out a notice that comes close to an outright ban for employers putting crypto in defined contribution plans. To be sure, this was regarding employee-sponsored plans (think 401(k)s)—not IRAs. But the message still rang clear: the DoL has “serious concerns” about the risks when it comes to retirement money.

Acorns says that its new Bitcoin exposure offering is a good move for investors who want to learn about Bitcoin and plans to add Bitcoin-related educational articles and content to its website, social media channels, and seminars. BITO doesn’t directly hold crypto—meaning that investors don’t have to worry about things like losing their wallet or theft, and it’s an ETF, so it’s a registered and regulated investment vehicle. Bitcoin exposure at Acorns is also capped at 5% (and may be as small as 1% depending on things like age, income, and money goals). That makes this allocation just about as risky for a portfolio as some stocks in the S&P 500, Wunder argues.

“Tesla has similar volatility characteristics in terms of total annual volatility as does Bitcoin itself,” Wunder says. “And so if you’re in a purely S&P 500 fund, you will actually have an asset already in your portfolio of similar size to how Bitcoin acts itself.”

And risk can actually make the most sense in a retirement account, Wunder says. “You can’t touch it for 20 years or 30 years, and so realistically, you’re the best long-term investor there is. In that long-term framework, with time on your side, you should actually have the most amount of risk.”

Acorns, which recently raised $300 million in new funding from TPG, BlackRock, and others, is not the only brokerage to add Bitcoin into the retirement account mix. iTrust Capital, BlockMint, and Bitcoin IRA do the same.

At the end of the day, it’s investors who decide where they will park their retirement cash. But I think it’s worth pointing out that not everyone is going to read the fine print, and not all risk is created equal.

See you tomorrow,

Jessica Mathews
Twitter: @jessicakmathews
Email: jessica.mathews@fortune.com
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Clarification: After the article was published, it was then specified by Acorns that the initial rollout of Bitcoin exposure would not include retirement accounts.

Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- ClearBank, a Bristol, U.K.-based banking platform, raised £175 million ($231.17 million) in funding led by Apax Digital and was joined by investors including CFFI UK Ventures and PPF Financial Holdings BV. 

- Omnipresent, a London-based global employment partner, raised $120 million in Series B funding co-led by Kinnevik and Tencent.

- Capitolis, a New York-based financial SaaS platform for capital markets, raised $110 million in Series D funding co-led by Canapi Ventures, 9Yards Capital, and SVB Capital and was joined by investors including a16z, Index Ventures, Sequoia Capital, S Capital, Spark Capital, Citi, State Street, and J.P. Morgan. 

- Span.IO, a San Francisco-based creator of electrical panels homes and chargers for cars, raised $90 million in Series B funding led by Fifth Wall Climate Tech and Wellington Management and was joined by investors including Angeleno Group, Robert Downey Jr.'s FootPrint Coalition, Van Jones’ Obsidian Investment Partners, A/O PropTech, and others.

- Me+Em, a London, U.K.-based luxury fashion brand, raised $72 million in a funding round led by Highland Europe. 

- Hex, a San Francisco-based platform for collaborative data science and analytics, raised $52 million in Series B funding led by Andreessen Horowitz and was joined by investors including Snowflake, Databricks, Redpoint, and Amplify Partners.

- Glia, a New York based-based digital customer service platform, raised $45 million in Series D funding led by Insight Partners and was joined by investors including Wildcat Capital and Management RingCentral Ventures. 

- Tomo, an Austin-based mortgage and transaction platform for buyers and real estate agents, raised $40 million in Series A funding led by SVB Capital and was joined by investors including Ribbit Capital, NFX, Zigg Capital, and Telesoft Partners.

- Nucleai, a Tel Aviv, Israel-based spatial biology company, raised $33 million in Series B funding co-led by Section 32 and Sanofi Ventures.

- Cascade, a Sydney, Australia-based strategy execution platform, raised $29 million in Series A funding led by Telescope Partners and was joined by investors including Five V and Carthona.

- Kayrros, a Paris-based climate and energy data analytics company, raised €25 million ($27.59 million) in funding from investors including Souveraineté, NewSpace Capital, Opera Tech Ventures, and others.

- MetaMagnet, a blockchain gaming platform operator built on the Terra blockchain, C2X, raised $25 million in funding through a private coin sale led by FTX Ventures, Jump Crypto, and Animoca Brands and was joined by investors including Hashed, Terra, Transcend Fund, Galaxy Interactive, Skybound, Blockchain Coinvestors, DeFiance Capital, Play Ventures, Crypto.com, Infinity Ventures Crypto, Unanimous Capital, Bowei, and others. 

- Antidote Health, a New York-based telehealth provider, raised $22 million in Series A funding led by iAngels, Group 11, and Flint Capital.

- Upshot, a blockchain-based protocol providing NFT appraisals, raised $22 million in Series A2 funding led by Polychain Capital and was joined by investors including Framework Ventures, CoinFund, Blockchain Capital, Slow Ventures, Mechanism Capital, and Delphi Digital, and others. 

- Plotlogic, a Bowen Hills, Australia-based deep-tech mining startup, raised $18 million in Series A funding led by Innovation Endeavors and was joined by investors including BHP Ventures, Touchdown Ventures, DCVC, Baidu Ventures, and GRIDS Capital. 

- Helcim, an Alberta, Canada-based payments company for small business, raised $16 million in Series A funding led by Information Venture Partners and Aquiline Technology Growth and was joined by investors including Generational Platform Partners, Accelerate Fund III, Boris Wertz, Klue CEO Jason Smith, Symend CEO Hanif Joshaghani, and Control HQ CEO Kevin Sandhu.

- Ursa Space, an Ithaca, N.Y.-based satellite intelligence infrastructure company, raised $16 million in Series C funding led by Dorilton Ventures and was joined by investors including Razor’s Edge Ventures, RRE Ventures, Paladin Capital Group, and others. 

- Decentriq, a Zürich, Switzerland-based SaaS platform focused on secure data collaboration, raised $15 million in Series A funding led by Eclipse Ventures and was joined by investors including Atlantic Labs, btov Partners, and Paladin Capital Group. 

- Brew, a Tel Aviv-based marketing platform, raised $12 million in seed funding led by Aleph and MizMaa and was joined by Gefen Capital.

- Learn In, a Salt Lake City, Utah-based upskilling platform for companies, raised $10 million in Series A funding led by Firework Ventures and was joined by investors including Kickstart Fund, GSV Ventures, and Album Ventures. 

- Tacto, a Munich-based procurement engine software company, raised € 5.3 million ($5.85 million) led by Cherry Ventures and was joined by investors including UVC Partners, Visionaries Club, and angels from Hanno Renner, Johannes Reck, Michael Wax, and Torsten Reil.

- Enzymit Inc., a Ness-Ziona, Israel-based computational enzyme engineering and bio-production platform company, raised $5 million in seed funding led by First Star Ventures and was joined by investors including Sapir Venture Partners and others.

- LAGO, a New York-based minted art display developer, raised $4.2 million in pre-seed funding from angels including James Ho, Ian Rogers, Jehan Chu, Mike Dudas, Tim Kang, Patricio Worthalter, Stani Kulechov, 888, Mariano Conti, Jimmy McNeal, and Sandeep Nailwal. 

- Better & Better, a New York-based company selling vitamin-infused products, raised $4 million in funding led by Fifth Quarter Ventures and was joined by investors including Dreamer’s Fund, Azure Capital, Alpaca Ventures, and others. 

- Lune, a London-based company that calculates its customers’ emissions when shopping, traveling, and shipping, raised $4 million in funding led by Crane Venture Partners and was joined by 15 other angel investors. 

- Kale, a New York-based payment platform for influencers, raised $3.75M in seed funding led by Forerunner Ventures and was joined by investors including Pear VC and Amber Atherton.

- Neivor, a Mexico City-based SaaS company that helps property managers and HOAs manage their condominiums, raised $3.5M in funding led by SoftBank Latin America Fund.

- Ramped, a San Francisco-based job application and recruitment platform, raised $3.1 million in seed funding from investors including Hustle Fund, Northwestern Mutual Future Ventures, Workplay Ventures, Vastly Viable Ventures, Eudemian Ventures, ETF@JFFLabs, Graph Ventures, and Operate VC.

- Azalio, a Washington D.C.-based workforce management software for frontline employees, raised $2 million in pre-seed funding led by the Urban Innovation Fund.

PRIVATE EQUITY

- Cuscaden Peak received approval to acquire the Singapore Press, a Singapore-based media and property company. The deal would value the company $2.9 billion.

- Ara Partners made a majority investment to form CycleØ Group, a Bilbao, Spain-based operator and developer of biomethane projects across Europe. As part of the deal CycleØ Group acquired FNX Liquid Natural Gas. Financial terms were not disclosed. 

- Saylite, backed by CORE Industrial Partners, acquired Southern Lighting Gallery, an Augusta, Ga.-based residential lighting company, and Charleston Lighting and Interiors, a Charleston, S.C.-based lighting and interior design company. Financial terms were not disclosed. 

- Stellex Capital Management acquired RTC Aerospace, a Chatsworth, Calif.-based provider of machined components and assemblies for aerospace and defense applications. Financial terms were not disclosed. 

- SupportNinja, backed by BV Investment Partners, acquired Bolton Remote, a Delaware-based provider of customer success, technical support, and product operations solutions. Financial terms were not disclosed.

OTHER

- Equinix agreed to acquire four data centers from Empresa Nacional De Telecomunicaciones. a Santiago, Chile-based telecommunications company, for approximately $705 million.

- Sony Corporation agreed to acquire Haven Entertainment Studios, a Montreal-based video game development studio. Financial terms were not disclosed. 

PEOPLE

- Antler, a Singapore-founded venture capital firm and startup studio, hired Jeff Becker as general partner. Formerly, he was with Forum Ventures. 

- Expa, a San Francisco-based venture capital firm and startup studio, promoted Yuri Namikawa to partner. 

- Seraphim Space, a London-based venture capital firm, hired Bob Wigley as senior advisor. Formerly, he was with Merril Lynch.