DOGE Cost Averaging: Robinhood introduces a fee-free recurring cryptocurrency purchase option
Robinhood, the investment app, is set to release a new feature that allows users to invest automatically in digital assets on a regular schedule (daily, weekly or monthly). With this characteristic, you can easily invest in cryptocurrencies like Bitcoin (BTC), Dogecoin (DOGE), Ethereum (ETC) and many others. The best part: no commission fee will be charged.
An important point to consider is that Robinhood will not automate trading. The approach is ‘automatic investing’; so you can steadily build your cryptocurrency portfolio. Robinhood will not automatically sell the digital currency for you, even if the AI algorithm thinks it is the right financial move.
The idea behind automatic crypto investing is to make the investors sit back and not worry about the frequently fluctuating stock landscape. This concept is called Dollar-Cost Averaging. As an investor you continue to put in the same amount regularly, regardless of how the market is faring. In the long run, the cost will average out on its own.
The term ‘Holding’ is an inside joke among crypto and Wall Street brokers. It implies holding on to your stocks no matter the losses, in the hope of eventually selling your stocks at a profit in the future. Some cryptocurrencies reward their users and investors for not selling their stock during periods of loss. Since 2019, Coinbase gives more coins to its users if they hold on to their stocks.
Robinhood’s automatic investment system is a more traditional approach. Although it is not available to the financial hub of the US, New York, the developers are aiming for a gradual roll-out of the feature throughout this month.