Mobile trading app Robinhood recently added cryptocurrency trading to its platform. Find out how it works today in our review.
What is Robinhood Crypto?
Robinhood Crypto is a new platform where you can invest in bitcoin and other cryptocurrencies over a mobile app. Launched in 2015, Robinhood is a popular investment app that lets you invest in conventional securities – like stocks or ETFs. In January 2018, the company announced that it was adding cryptocurrency and bitcoin trading to its platform.
An early access page is available to users at crypto.robinhood.com. As of January 25, over 170,000 have signed up for early access. Robinhood will add crypto trading to its platform in February 2018. Today, the Robinhood app is available to download for Android and iOS.
How Does Robinhood Crypto Work?
Robinhood’s cryptocurrency trading features are accessible from the same interface as the standard Robinhood features. All your cryptocurrencies, stocks, ETFs, and options are available side by side, accessible in one app.
You can buy securities immediately after buying bitcoin, for example, then track everything from one place.
Robinhood emphasizes easy access to funds: wherever you go, you’ll be able to easily invest in whatever asset you desire. You don’t have to miss a major news story and miss out on the next big crypto jump.
In preparation for the launch of crypto trading in February, Robinhood added crypto news and price alerts to its app in January. Today, users can track the price and news for 14 top cryptocurrencies, including bitcoin, Ethereum, Litecoin, and Ripple.
How Much Does Robinhood Cost?
One of the biggest advantages of Robinhood is its no-commission stock trading structure. That’s why the app is named “Robinhood”. Today, crypto exchanges like Coinbase charge fees as high as 5%. Meanwhile, conventional cryptocurrency exchanges charge fees of around 0.3% for the average trade. Robinhood won’t charge any such transaction fees.
The company plans to operate their business on a break-even basis, with no plans to change their commission structure in the foreseeable future. Their focus is on growing a customer base and continuing to serve existing customers more efficiently.
How does Robinhood make money? Does the company just run a charity? No. Robinhood – a company worth $1.3 billion – was built to pool investors’ money into a single pool. Robinhood earns interest from that enormous pool of capital.
Robinhood also has a premium subscription plan called the Robinhood Gold premium tier. That subscription is priced at $6 to $200 per month and lets users borrow between $1,000 and $50,000.
Robinhood was founded in 2013, with the app appearing online in 2015. The company has raised $176 million from top investors like Andreessen Horowitz, Index, and NEA. These investors collectively value the company at $1.3 billion.
Robinhood was founded by Baiji Bhatt and Vlad Tenev. Today, Robinhood has approximately 3 million users.
How to Place a Crypto Order with Robinhood
Placing a cryptocurrency order with Robinhood is designed to be as straightforward as possible. When the crypto feature launches, you’ll be able to instantly transfer up to $1,000 from your connected bank account (or more, if you have a Gold membership). Any additional funds transferred to the platform will arrive later via ACH transfer (i.e. you can transfer more funds, but you’ll only have instant access to the first $1,000).
This instant access to money is crucial: on other crypto trading platforms, long transfer times can create annoying delays, which means users miss out on price drops and other purchase opportunities.
The entire Robinhood Crypto trading interface features an 80s-style Tron design. This is different from the conventional “day and night” themes on the usual Robinhood trading interface, where day and night indicate whether the markets are open or closed. In the crypto world, the markets never close.
Once you have money in your account, you can place a buy or sell order.
Robinhood gives you an estimated price, connects to a slew of trading venues, exchanges, and market centers to find the lowest price, and uses its economies of scale to score better prices over time.
Robinhood also reduces market volatility by putting a “collar” around your trade. If it can’t execute your trade at close to the estimated price, then Robinhood will wait for the price to return to that “collar” – or return your money.
Robinhood will also support limit orders, which means you can set a price where you automatically buy or sell.
The full list of coins available to track through the Robinhood platform include Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ripple, Ethereum Classic, Zcash, Monero, Dash, Stellar, Qtum, Bitcoin Gold, OmiseGo, NEO, Lisk, and Dogecoin.
However, only BTC and ETH will be available for trading when Robinhood rolls out the feature in February. Furthermore, the feature will only be available to Americans in select states at first, including California, Massachusetts, Missouri, Montana, and New Hampshire. More cryptocurrencies and states will be added in the near future.
Robinhood Crypto Conclusion
Robinhood Crypto is an investment app with 3 million users. The app offers no-commission-fee trading to American investors who want to invest in ETFs, securities, and other assets. In January 2018, the company announced it was adding cryptocurrency investing to its platform. Initially, users will be able to purchase Bitcoin (BTC) and Ethereum (ETH) through the platform when the feature launches in February.
You can download Robinhood today from the Google Play Store or iOS App Store. Or, visit online at crypto.robinhood.com to sign up for early access.