Robinhood co-founder and co-CEO Vlad Tenev sat down with CNBC's Andrew Ross Sorkin to discuss the trend of people putting their stimulus checks to work in the market and how he tracked this among Robinhood customers. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

Robinhood’s young customers are actually smart, long-term investors who recognized that the market sell-off in March was a buying opportunity, the co-founder of the pioneering zero-commission trading platform told CNBC on Tuesday.

“They’re at the beginning of their investing journey and think they recognize that there’s many, many decades for things to smoothen out in front of them,” co-founder and co-CEO Vlad Tenev said on “Squawk Box.”

In the interview with Andrew Ross Sorkin, he also discussed the company’s stellar year, volatility ahead of the election and the possibility of an IPO. Robinhood saw a record 3 million new customers in the first four months of 2020 when the coronavirus pandemic roiled markets and threw the economy into a recession.

The coronavirus downturn spurred young people — in some cases, for the first time in their lives — to get started with investing. Robinhood’s inflow of new clients showed that young and inexperienced investors saw the market rout in March as an entry point into investing, especially with many stuck at home during the nationwide lockdown.

Retail investors, especially the younger traders on Robinhood, have sometimes been derided as the so-called dumb money, chided for their lack of sophistication compared with Wall Street pros. But investor newbies jumped into the volatile market in March at the right time, pouring money into stocks most affected by the global pandemic, like airlines and cruise lines.

“I think in March, what you saw was a lot of these, a lot of these customers who were now able to invest became interested in it because they saw the market have a large drop,” Tenev said.

He also said the zero-commission model now adopted by the whole industry played a part.

“Firstly, the commission-free model that we essentially pioneered, you saw the barriers to entry go down for investing, not just for our own customer base, but industrywide in the U.S.,” added Tenev. “So that allowed a new generation and a new type of customer who was previously underserved to start investing for the first time.”

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