Investment App Robinhood to Add Cryptocurrency Trading
Despite the cryptocurrency market softening some in recent weeks, there’s still no shortage of investors curious about the space. Enter the commission-free trading app Robinhood with plans to make buying and selling certain crypto coins easier and cheaper. As TechCrunch reports, the app plans to introduce trading for Bitcoin and Etherum next month (interested users can sign up for early access) with more coin options to follow. Moreover these trades will be made without any transaction fees. Meanwhile the popular Coinbase app charges users between 1.5% and 4% on trades.
Once launched, Robinhood Crypto will allow users to transfer up to $1,000 from their connected bank accounts instantly. When you decide to buy, the app will present you an estimated price and will utilize a variety of exchanges to secure the best price. In the event a purchase cannot be made in the range of the estimated price, your trade will be put on hold until that price returns. Like with several types of trades, users will also be able to set automatic buy and sell triggers for coins. However, unlike the other investments Robinhood deals in, the crypto market is open 24/7, leading the app the tout the tagline “Don’t Sleep” for their new offering.
Interestingly Robinhood co-founder Vlad Tenev tells TechCrunch that this venture into crypto is not about making money in such a hot space. Cyrpto trading will serve as a loss leader that will raise the app’s profile and attract new users. “We’re planning to operate this business on a break-even basis and we don’t plan to profit from it for the foreseeable future. The value of Robinhood Crypto is in growing our customer base and better serving our existing customers,” he said. Currently the app has around three million users.
What’s also notable about this move is that Robinhood will let users track more traditional investments like stocks and ETFs alongside crypto prices. In a way this could help further legitimize cryptocurrencies at a time when Bitcoin futures and other signs of mainstream acceptance continue to creep up. Of course there’s also the hope that the app’s user-friendly interface will help demystify crypto trading for the Average Joe.
Speaking to TechCrunch, Tenev says that adding cryptocurrency trading to Robinhood aligns perfectly with the app’s mission to make investment trading more accessible. As he explains, “[Cryptocurrency] puts power that’s historically been held by financial institutions in the hands of the people. I think that lines up directly with Robinhood’s mission to democratize the financial system.” Robinhood Crypto will first be rolled out to users in California, Massachusetts, Missouri, Montana, and New Hampshire with more states to follow.