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Robinhood Starts Crypto Trading
‘Robinhood’ the no cost stock trading mobile app provider is the latest high-profile entrant into crypto trading. The company has announced that starting February’2018, it will provide the service to users in California, Massachusetts, Missouri, Montana and New Hampshire. Robinhood would initially provide its customers Bitcoin and Ethereum trading immediately.
It would also allow its users to add 16 cryptos in their watch list. Subsequently, Robinhood plans to offer services for additional 14 cryptocurrencies i.e., for Bitcoin Cash, Litecoin, Ripple, Ethereum classic, Zcash, Monero, Dash, Stellar, Qtum, Bitcoin gold, Omisego, Neo, Lisk and Dogecoin. Currently, company doesn’t have plans to add complicated asset classes like Crypto futures.
Company has formed an internal ‘listing committee’ to analyze Security, Functionality and Demand to assess cryptocurrencies that could be added for trading in the app.
While speaking to various media houses, Robinhood co-founder Vlad Tenev said,
“We've come to understand that cryptocurrencies as an asset have exhibited clear and underlying resiliency and have integrated themselves as part of a diversified and balanced portfolio.” He further added by saying, “We view entering crypto as a way to extend our user base and build our brand.”
The micro-finance giant Robinhood Markets, is California based financial services company. Therefore, company comes under the regulations of SEC and FINRA of the United States.
The company was founded in 2013, and makes money from interest earned on customers cash balances and margin lending. Company offers an app for young investors to trade stocks through smartphones for free.
Since last 5 years, Robinhood has democratized stock trading and already has a base of 3 million users.
Currently, Robinhood has not built its cryptocurrency wallet and therefore would be using the services of a third-party provider.
Robinhood’s entry into cryptocurrency market is a big cheer for investors because they have been paying fee ranging from 0.1% to 4% per transaction on various platforms. Robinhood has promised to provide crypto trading service for free along with promise of instant transfers of cryptocurrency purchases for $1000 or less.
Robinhood will have no minimums or maximums, no withdrawal limits for crypto trading. The startup will hold all its digital coins offline in a cold storage to prevent hacking.
Currently the app provides its stock traders many features like Commission free trading, Instant deposits, Secure & established platform. Going ahead, crypto traders can expect these features being facilitated for Robinhood Cryto account holders.
Addressing the conventional fear & confusion of newcomers, Robinhood app will provide an easy way to trade with crypto for free. By offering simple-to-use analysis & transaction tools, the company should be able to pull in more users.
The company is a direct competitor to Coinbase which has more than 11.9 million users. However, by providing free transactions and wide range of cryptocurrencies, Robinhood should be able to penetrate the market to some extent.