The Robinhood app has announced that customers in four US states will be able to buy and sell Bitcoin (BTC) and Ethereum (ETH). The four states that can use crypto on the app are California, Massachusetts, Missouri, and Montana. This will expose many new people to cryptocurrencies and make them simpler to buy.
Robinhood Vs. Coinbase
Why should Coinbase be worried? Robinhood will offer trading of digital assets commission free. Coinbase charges 1.5 to 4% fees when buying cryptocurrencies, this will convert into large savings for Robbinhood users. This is most likely why four million users signed up for the Robinhood Crypto waiting list in the first five days of its announcement to add crypto in January.
Robbinhood has only added BTC and ETH trading but they are working on adding at least 16 other cryptocurrencies. As of now Robinhood users can track the price of: Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ripple, Ethereum Classic, Zcash, Monero, Dash, Stellar, Qtum, Bitcoin Gold, OmiseGo, NEO, Lisk and Dogecoin. There has been no news on when other assets will be added.
How Do They Charge Zero Fees?
Simple, the Robinhood app charges subscription fees for users who trade with money borrowed from the platform. They also earn money off of the interest on the money that app users have stored in their accounts. This model lets Robinhood offer 0% trading fees for stocks and cryptocurrency and could be a problem for other stock and crypto platforms.
Robinhood entering into the world of cryptocurrency could bring in a lot of new investors. The Robinhood app will make it easier and cheaper for new investors and allow them to become familiar with cryptocurrencies. Widespread adoption is needed for cryptocurrency to become the groundbreaking innovation that it intends to be.
New to crypto? Join Coinbase with my link to get $10 of free bitcoin when you buy or sell $100 worth of Bitcoin.
Legal Disclaimer:
I am not a financial adviser nor is any content in this article presented as financial advice. The information provided in this blog post and any other posts that I make and any accompanying material is for informational purposes only. It should not be considered financial or investment advice of any kind. One should consult with a financial or investment professional to determine what may be best for your individual needs.
An informative post @davidmichael I found an upcoming similar product. Would like to hear your opinion- https://steemit.com/ico/@jackdickens382/personal-wealth-management-for-cryptoassets
Good news
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You missed one thing: when you buy crypto on robinhood, you don't actually have the crypto. You can't send it to your wallet. You are simply trading the paper derivative of the underlying asset. If you like to get in and out of it, its a great platform for that. But if you want to hold in the long term, I would suggest buying the real thing.
Yes, this is true. People who use Robbinhood trade stocks so they would treat crypto the same as they do stocks. Also, new investors in crypto would feel more comfortable using Robbinhood because they don't want to worry and learn about wallets and protecting your btc and all that. People like us want to hold actual bitcoin, because we know its better and already know how to do everything. Anyway the main point is like you said its great for getting in and out and it will still spread adoption.
Options trading for crypto on Robinhood would be killer.
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