Robinhood will allow automated crypto investments
A growing number of Americans want to invest in cryptocurrency, and Robinhood is one of the most popular brokerage firms to offer this. Now the trading platform is rolling out a new feature that can make crypto investing even easier.
Although Robinhood has a long history of allowing its users to make automated investments in stocks and exchange-traded funds (ETFs), this feature is not available for cryptocurrency purchases. That is about to change, as Robinhood is unveiling a new feature that allows its users to make automatic recurring crypto investments if they choose to do so.
Here’s what you need to know.
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Robinhood’s New Feature to Streamline Cryptocurrency Transactions
Many people like to use automated investing, which means âset it and forget itâ, so they don’t have to manually make the decision to buy assets. The set-it-and-forget-it strategy is a common strategy that allows people to specify an amount of money to invest in an asset at a particular time interval. For example, you can choose to invest $ 50 every Monday in a particular stock, ETF, or virtual coin.
Automated investing at regular intervals is not only convenient, but it eliminates the problem of trying to time the market. If you regularly buy a small portion of a particular asset, sometimes you will end up investing when the price is going down and other times you will end up investing when the price is going up. This technique is also referred to as âcost averaging in dollarsâ.
This strategy can be especially useful for more volatile assets that tend to have large price changes, such as cryptocurrencies. When you average the dollar costs in an investment, you avoid the problem of poor timing of buying and buying right before the price peaks. Short-term price fluctuations won’t matter as much, as you’ll increase the chances that you’ll end up paying a fair price over time by buying at a bunch of different prices.
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Unfortunately, Robinhood investors did not have the option of using the define-and-forget investment with cryptocurrencies. Now that has changed. A significant number of Robinhood investors have already had the opportunity to use automated investing for cryptocurrencies and everyone on the platform is expected to have access to the feature by the end of September.
Robinhood isn’t the only crypto platform to offer this service: Binance and Gemini, which are two cryptocurrency platforms, also allow automated crypto investing. But Robinhood is one of the best-known brokerage firms to do so.
Interested in automating cryptocurrency investments? It’s important to remember that while automated investing can reduce risk, there are always dangers inherent in crypto investing. These assets tend to be more volatile than stocks and ETFs, and coin values ââare often more speculative. Be sure to do your research and consider taking the advice of many financial professionals like Suze Orman who advise against investing in crypto that you can’t afford to lose.