Robinhood has joined other crypto companies to launch a new feature known as recurring purchases or dollar-cost averaging (DCA).
On Wednesday, Robinhood launched a new service that will allow its crypto users to buy coins for as little as a dollar on a monthly, weekly, or even daily basis.
This form of buying, also known as recurring purchases or dollar-cost averaging, is a popular stock-investing strategy that is seen as a good way to protect against market volatility.
The possibility for investors to buy tiny quantities on a daily basis, according to Christine Brown, COO of Robinhood Crypto, is especially important when it comes to the cryptocurrency markets, which are particularly volatile.
Brown told Decrypt, “This allows customers to adopt a long-term perspective to crypto.”
She went on to say that the recurring purchase function would be particularly appealing to those who are new to crypto and are terrified by the market’s periodic crashes, such as the one on Tuesday that saw Bitcoin and Ethereum drop as much as 15% before recovering somewhat.
In launching the function, Robinhood stated that any recurring feature will be free of charge or commission, in contrast to other crypto platforms, which charge up to 4% in transaction fees.
The remark could have been a subtle swipe at Coinbase, the world’s largest crypto retail business, which charges a fee on every transaction and is shaping up to be Robinhood’s main strategic competitor.
Of course, Robinhood isn’t giving away its crypto services for free. Although the company makes money by selling crypto tokens to clients at a greater price than it pays for them, Brown claims that customers still get significantly more value than they do on fee-based platforms.
She also pointed out that some competitors charge greater rates for recurring transactions than for one-time transactions, incentivizing customers to make larger single purchases rather than frequent smaller ones.
Robinhood’s announcement comes at a time when the company’s crypto business is rapidly growing. Robinhood is best known for being a place to buy stocks.
During a recent earnings call, Robinhood revealed that the majority of its first-time users’ purchased cryptocurrency rather than equities in the previous quarter.
The company has also hinted at much larger crypto goals, such as a plan to introduce more coins than the seven it currently offers, as well as the creation of a standalone crypto wallet.
However, Robinhood has been tight-lipped regarding the timing of these products, and Brown declined to say whether they would be available before the end of the year.
Starting today, Robinhood’s recurring crypto purchase will be available. Customers will be able to use it within a month, according to the business.
