Robinhood also promised commission-free transactions to investors irrespective of the volume of transactions in Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies on the platform
Yesterday, one of the world’s leading crypto platforms, Robinhood, announced it would start the roll-out of all recurring investments on its platform, which will, in turn, help investors enjoy hitch-free transactions.
The new feature promises to allow investors to buy crypto assets at their convenience and a stipulated schedule. The schedule might be daily, weekly or even monthly, depending on each investor’s holding power.
Robinhood went ahead to promise a commission-free transaction to investors irrespective of the volume of transactions in Bitcoin, Ethereum, Dogecoin, and other crypto assets on the platform. The new feature automatically invests on schedules set by investors. The crypto outfit maintains that its algorithm won’t make decisions for its clients but will give suggestions in helping investors build a strong portfolio.
According to their released statement, “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 crypto firm, while trying to prove that its current plan was done in the best interest of its users wrote that “Many other crypto trading platforms charge a commission fee up to 4% for each crypto trade. On top of that, fees on other platforms are higher for smaller recurring purchases than they are for a single large one. While that may make your strategy to regularly invest small dollar amounts more profitable for those companies, it ends up being counterproductive to building long-term wealth. At Robinhood, if you place an order and spend $100 to buy bitcoin, you’ll get $100 worth of bitcoin. Period.”
Robinhood’s automatic investment feature mimics the “dollar-cost averaging” strategy, allowing investors to focus mainly on investing regularly irrespective of the market trends. Investors will be focusing on the financial maxim “the market time over timing the market”.
It should be noted that the platform revealed that this feature will not be available to its users in New York.
Cathie Wood Defends Robinhood’s Payment-for-order Flow
We reported that the US financial regulator SEC was targeting Robinhood’s payment for order flow system which the firm had stated that it was a better deal than the traditional one.
Its position has further been strengthened by Ark Invest founder Cathie Wood who praised it in a recent interview saying that “the system has been so good from an execution point of view for the end investor. So we’d be surprised to see a lot change on that front.” She, however, hinted that the decision of the watchdog would have to be paid attention to because “we’re in a situation where we have to listen to what the SEC is saying.”