Robinhood, the trading app including crypto, has introduced a new feature that protects its investors from the price volatility of cryptocurrencies.
According to reports, the feature is called “price volatility protection” and is expected to modify certain orders on crypto depending on price fluctuations.
In this regard, Vlad Tenev, CEO of Robinhood said:
“We’ve been doing a lot of work behind the scenes to provide our crypto customers with the functionality that they’ve been asking for. We want to introduce new features safely, and there’s a lot of items we have to get right from the start”.
What would be achieved with this new protective feature, is simply a message in the code that could sometimes cause recurring preset orders to be skipped or buy less than the chosen or pre-determined amount.
All of this, by obviously alerting the user before taking any action, with the stipulation that the feature will never act by buying more than the amount that was selected.
Robinhood and its solution against price volatility
The new feature of the stock and crypto trading app could also be a protective tool not only for investors but also for the platform itself.
Indeed, recalling last May, Robinhood suffered a downturn after the price of Dogecoin (DOGE) continued to record highs.
We’re currently experiencing issues with crypto trading. We’re working to resolve this as soon as possible. For the latest updates, check https://t.co/ZS733G6N1J
— Robinhood Help (@AskRobinhood) May 4, 2021
“We’re currently experiencing issues with crypto trading. We’re working to resolve this as soon as possible. For the latest updates, check http://status.robinhood.com“.
At that time, in fact, DOGE saw a total 900% price pump and the frenzy of users, including those of the app, most likely made it go haywire.
At the same time, Warren Buffett, the US entrepreneur nicknamed the Oracle of Omaha, criticized the Robinhood app. His comment referred to the ease of use of the app that made trading a game, comparing Robinhood to a casino game.
Luckily, at the end of that same month, Robinhood took the top spot on CNBC’s Disruptor 50 list of 2021. A list of disruptive companies that not only survived the pandemic but were also able to bring major change to the tech industry of which they are a part.