Robinhood has a new feature to prevent huge price swings and volatility
Robinhood has unveiled a new feature for its crypto product that will allow customers to automatically make investments in the market on a recurring basis, continuing the company’s rapid expansion.
- Robinhood has a new feature for their crypto product customers
- The new feature is to prevent huge price swings and volatility
- Starting on Wednesday, the product will be accessible to a small number of people.
According to the brokerage software firm, the functionality would help mitigate crypto’s volatility by allowing customers to invest in intervals rather than all at once—a technique known as dollar-cost averaging. Starting on Wednesday, the product will be accessible to a limited number of people.
“Dollar-cost averaging encourages investing money gradually at regular intervals, rather than all at once and regardless of where market prices stand, in order to help smooth out the price swings that can sometimes occur,” Robinhood said.
Robinhood isn’t the only crypto platform that allows users to atomically invests. Competing firms such as Uphold and Coinbase offer similar features. Even though Robinhood has been characterized as an alternative to stocks and ETFs, its introduction of recurring crypto investments is a step toward diversification for the firm, which recently debuted on Nasdaq.
According to the company’s most recent earnings, transaction-based sales from cryptocurrency trading increased 4282% from Q2 2020 to Q2 2021.
The platform currently has a waiting list of more than 1 million users and is reportedly close to entering the top 5 crypto exchanges.
The free trading app also revealed that it had purchased an additional 6 million shares in the second quarter, significantly more than its previous 4-million share purchase at the end of 2018.
According to TechCrunch , Robinhood will likely seek additional capital in the near future to finance its expansion into international markets and efforts to reach profitability.
In a related story, PayPal is looking to buy or partner with a broker-dealer to introduce its own stock trading service to compete with rivals such as crypto-friendly stock trading app Robinhood, CNBC reported on Monday.