Comparing Makara to Traditional Roboadvisors

Authored by Makara


Published September 30, 20214 min
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We’re proud of what we’ve made here at Makara, and we feel that the hunch the company is built upon has so far been proven right: Smart, careful, algorithmic investing in crypto markets can lead to huge gains. Yes, returns across industries have been impressive since we launched in late spring, but our investments have gone up even more.

Since we’re in a unique position as a roboadvisor for crypto, it’s hard to determine exactly who our competition is. It could be crypto exchanges, but they don’t offer any sort of investment strategy, much less one like ours. The other roboadvisors out there work primarily in traditional markets, which is different than crypto. Also, we’ve only been accepting outside investment for four months, so to compare year-over-year data, we need to make some assumptions. But for comparison’s sake, let’s take a look. 

Our results range from exceptional—had we been taking investment 12 months ago, our DeFi basket would have grown more than 150% in the past year—to astounding—our Universe basket would have nearly hit 450%. Vanguard’s roboadvisor portfolios made up of traditional stocks averaged a rise of just below 26%, and Wealthfront and Schwab’s best performing roboadvisor portfolios grew almost 28% and a little over 44%, respectively. Those are fine returns, of course, but they’re not our returns. Here’s why we think everyone needs to include Makara in their portfolio.

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No other roboadvisor deals exclusively in crypto.

Most roboadvisors use algorithms to manage people’s money, and we all generally share a perspective: We believe in keeping pace with the market rather than trying to beat it. The crucial difference, though, is which market we exist in. Wealthfront, Schwab, and Vanguard almost exclusively invest in the traditional financial world, while we are exclusively in the crypto market. (Wealthfront is the only advisor of the three that invests in crypto—but it’s a tiny amount.) 

Which means we’re not exactly competition.

Crypto can be a more volatile market than most. We’ll always be among the first to say it. That’s also why we’re always among the first to tell you not to put all of your savings into crypto (just as we wouldn’t advise anyone to put all of their savings into any single asset or asset class). We see crypto as one part of your investment strategy, so while some call us competition to other roboadvisors, we consider ourselves to be complementary. It’s not a matter of choosing us or a company like Schwab or Vanguard; you should actually choose both.

We want to be for everyone.

Some of the dustier investment services can feel like they’re built for 55-year-olds who can recite their 401k balances and are starting to think about how many times a day they’ll be on a boat during retirement. The flashier ones seem to be built for risk-seeking, hyper-online millennials who consult r/wallstreetbets like an oracle. We want Makara to appeal to both of those ends of the investor spectrum—and everyone in between. That’s why we’ve built a product that’s really simple to use and that speaks to people like they’re humans. If you’re over 18, you’ve got some disposable income, and if you’re crypto-curious, we want you to feel welcome with us.

Making people feel welcome means being affordable.

Our minimum investment is just $50. That’s 10 times less than Wealthfront, 60 times less than Vanguard, and 100 times less than Schwab. You don’t need a Maybach to invest with us, but we will think it’s cool if you have one. Having such a low barrier to entry is yet another way we try to welcome people from all backgrounds. Because to us, the most important part of investing is getting started. If you’re intimidated or excluded, you’re not on the path to building wealth.

We believe in the future of crypto. Over the short term, of course, it will remain super volatile, but over five, 10, or 20 years, we believe its value is only going to go up. (And we’re not alone.) If that is indeed true, it is important to invest now and start getting more and more comfortable in this space. But we also think it’s important for you not to just take our word for it. That’s why we put so much effort into educating our clients, both new and old. If you can’t understand what you’re investing in, you may not understand why you’re investing. Which can keep you from investing in the first place. 

But that doesn’t mean we’re just for newcomers.

A significant portion of people who invest in Makara are people who have invested in crypto before and, frankly, could run their own very successful portfolios if they wanted. The thing is, they’d rather spend their time focusing on something else, which is fine by us. We’re more than happy to do the work for you. (And we won’t lie: We consider these experienced crypto investors’ confidence in us a pretty huge endorsement of what we’ve done.)

We have a different perspective on the risk of crypto.

As you can probably tell by now, we’re not shy about saying that crypto is volatile in the short term. There’s no denying it—and, in fact, we want you to understand it, so that you optimize your strategy for your goals and your comfort levels. But if you look over a longer span of time, crypto has been by far the best performing asset in the last decade. And that’s what makes up the other side of risk: the cost of not investing. People don’t tend to think much about the risk of what they didn’t do, but there’s a lot of risk in not investing in crypto as it continues to rise—and in not weathering the swings of this market for the sake of seeing the long-term returns.

We’re here to stay.

Like crypto, we aren’t going anywhere. And we hope to bring you with us.

Disclaimer: We try our best to provide you with helpful information to make your investment decisions. Please be aware that, as noted above, there are some significant differences between traditional roboadvisors, who invest primarily in stocks and bonds, and Makara, which advises you about cryptocurrency exclusively. Because of this, direct comparisons between the different roboadvisory services and their respective performance is only of limited value. You should also note that Makara’s basket performance metrics are calculated using performance of the baskets prior to Makara’s official launch date. Please refer to the help center for more details on our performance.