How Robo-advisors Are Rewiring Crypto Investing
Advances in automation manifest in different areas of our lives, starting with automated houses, self-driving vehicles, and personal investment.
Robo-advisors, also known as automated investing is another way of investing your money relying on digital financial advice based on mathematical rules or algorithms. When you choose an automated advisor, your money is put into work in accordance with sophisticated technology that will control trading and perform periodic portfolio rebalancing among other things. Unlike a traditional advisor, an automated advisor will always follow calculated principles.
Historically, funds that track the major stock indices have performed better over the long term than the vast majority of actively managed funds. Although there is no guarantee that this will remain to be a case in the future, having a technological framework with a set order of commands to follow the common patterns of the market and adjust your portfolio accordingly is a reasonable approach to investment. Another appeal of automated investing is lower fees compared to fees charged by personal financial advisors. In addition, robo-advisors rarely demand a minimum balance.
What is the most intriguing part of an automated investment, however, is that it allows people, with no financial skills or knowledge, and most importantly time, to put their money to work in a few clicks. Investment becomes as easy and convenient as online shopping.
A survey carried out by Charles Schwab earlier in 2018 revealed that 25% of more than 1,000 respondents are eager to automate their day-to-day finances. More than half (56%) wanted to control their finances to be “as simple as booking a hotel room.” The respondents between ages 18–34 see investing in cryptocurrencies as a means to save for retirement, considering a scarcity of seemingly better options alongside a deeply rooted skepticism about the global financial system. Companies, such as Automata, a partner of Ternion, and others start to build platforms based on algorithms to connect crypto investment with automating investment.
Efficiency, accessibility and lower fees are making robo-advisors very popular particularly among millennials who manage their affairs online. Robo-advisors are accessible 24/7, and you can sign up, deposit, check your transactions, and withdraw your money on the go. Many companies also offer an option to schedule a voice or video call if you want to hear more about the options or have any questions about your portfolio.
Frederick W. Smith said, “If you look historically, what creates growth and wealth is innovation and investment, and increase in scale — more customers.” Operating on a cross-road of finance and technology, robo-advisors eliminate barriers to easy financial investing to people who want to build a credible portfolio comprising of traditional or crypto assets without overly difficult onboarding process. And thus, resulting in more customers and crypto supporters.
Disclaimer: This article and information contained herein is intended for general knowledge only and does not constitute investment advice. We do not in any way warrant or guarantee the success of any action you take in reliance on our statements or recommendations.
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