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Robinhood opens up a slow and steady approach to crypto investing

Robinhood opens up a slow and steady approach to crypto investing


Recurring purchases for coins

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Illustration by Alex Castro / The Verge

Robinhood is rolling out a new feature that lets you automatically invest in cryptocurrencies on a daily, weekly, or monthly schedule. The investment app says this service will let you automatically invest in things like Bitcoin, Ethereum, Dogecoin, and other supported cryptocurrencies without a commission fee.

Before we go any further, though, I should warn you that nothing in this article is qualified or expert financial advice. It’s probably wise to talk with an expert who can help you come up with an investment strategy that’s right for you.

Robinhood’s approach here is automatic investing, not trading. It won’t sell the crypto for you when an algorithm decides it’d make financial sense to do so. Instead, it’s just steadily building your crypto portfolio.

A view of what recurring crypto investments looks like.
A view of what recurring crypto investments looks like.
Image: Robinhood

Robinhood pitches this as a way to do “dollar-cost averaging,” which is more or less financial speak for not worrying about what the market is doing and instead investing the same amount regularly, letting the gains and losses come out in the wash. In other words, you’re adhering to the financial maxim “time in the market beats timing the market.” Of course, in this case, the market isn’t an index fund or anything like that; it’s cryptocurrencies, which have a reputation for being rather volatile. Whether the strategy works for Bitcoin et al. is probably a question for more finance-focused publications and experts.

The concept of “HODLing,” or holding, has long been a meme in the crypto and WallStreetBets communities. They’ll sometimes encourage people to keep their stocks through whatever losses may come in hopes of selling them for a profit in the future.

Robinhood’s approach is a traditional finance method applied to crypto

There are other cryptocurrencies that try to reward users for holding in different ways. Coinbase has been giving users extra coins for keeping certain cryptocurrencies since 2019. That kind of system is actually the basis of an alternative mining system called proof-of-stake, which looks to solve the energy demands of the more traditional proof-of-work systems. In proof-of-stake systems, miners put up their crypto as collateral for a chance to create a block, and if they're chosen, they’ll get a reward.

However, Robinhood’s approach is much more in the vein of traditional finance methods, just applied to new tech. It’s somewhat ironic, then, that the feature isn’t available to users in New York, a major financial center in the US. The company says that the feature will be “gradually” rolling out to its users throughout the month.