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Published: May 18, 2021 9 min read

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A robot hand is presenting an investor with crypto coin.
Kiersten Essenpreis for Money

Robo-advisors have been suffering from Bitcoin FOMO. Now some of these automated financial and investing platforms are dipping their toes into volatile cryptocurrencies — and trying to square the speculative investments' notorious volatility with robos' stated goals of helping young people invest for the long term.

Robo-advisors came on the scene a decade ago as Wall Street recovered from the 2007-08 financial crisis. Driven by algorithms, they ask investors to share information about their financial situation, goals and risk tolerance and use it to recommend a diversified mix of stocks and bonds. Today, Robo-advisors manage hundreds of billions of dollars, and have transformed investing for a new generation, making them one of the hottest innovations in the investing world — until cryptocurrency came along.

Buzz around Bitcoin, Dogecoin and others has recently exploded, creating a dilemma for robo-advisors: Should they ignore the chorus of criticism and join the crypto party, or should they risk losing the relevance that attracted new investors?

It’s akin to the fear of sitting on the sidelines while friends win big with crypto that millions of everyday investors face too, but now taken on by Wall Street and Silicon Valley executives.

Robo-advisors consider taking the crypto plunge