Robinhood rolls out recurring investments to combat crypto volatility

Robinhood users can schedule their crypto portfolio to buy new coins as frequently as every day, under a new tool launched by the online trading platform.

The trading app said users can set up the feature, starting at an investment of $1, to buy new coins without paying a commission on a daily, biweekly or monthly schedule. It will gradually become available to US users outside of New York this month.

“Saving is a habit and recurring investments introduces a strategy to grow holdings over time while potentially reducing the impact of market volatility,” Robinhood said in a 9 September blog post.

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The feature is planned around a strategy known as ‘dollar cost averaging’, it said, which encourages investing at regular intervals to smooth out price swings.

Cryptocurrencies have been growing in popularity among retail investors in 2021, but have been marked by several significant price flash crashes.

Most recently all major tokens including bitcoin, ether and cardano slid more than 10% across the board on 8 September, prompted by regulatory action against Coinbase and technical outages during the launch of bitcoin as legal tender in El Salvador.

“The crypto markets can be volatile due to the nature of the industry. Investing on a recurring basis can help you focus on long-term growth, reduce risk, and reduce the stress of timing the markets,” the firm added.

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Crypto has become a major breadwinner in the business models of commission-free trading apps, which make money when customers choose to use linked subscription-based products such as derivatives.

Robinhood rival eToro said its cryptoassets business drove stellar growth in its earnings from commission earlier this year, with its highest trading volumes reported in bitcoin, XRP, ether, cardano and dogecoin.

To contact the author of this story with feedback or news, email Emily Nicolle

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