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No-commission stock trading app Robinhood will let you buy and sell Bitcoin and Ethereum without any added transaction fees kicking off ter February, compared to Coinbase’s 1.Five to Four procent fees te the US. And spil of today Robinhood will let all users track the price, news, and set up alerts on those and 14 other top crypto coins, including Litecoin and Ripple.
“We’re programma to operate this business on a break-even voet and wij don’t project to profit from it for the foreseeable future” says Robinhood co-founder Vlad Tenev. “The value of Robinhood Crypto is ter growing our customer colchoneta and better serving our existing customers.”
By essentially using crypto trading spil a loss leader instead of its primary business like Coinbase and other apps, Robinhood could substantially expand beyond the Trio million users it already has. Simplifying trading and tracking could bolster Bitcoin and Ethereum. And by combining it with traditional stock, ETF, and option trading ter a single app, Robinhood could further legitimize the cryptocurrency craze. The two trading worlds could cross-pollinate, dragging even more people into the crypto toneel.
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Robinhood founders Baiju Bhatt (left) and Vladamir Tenev (right)
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Many of the startups dealing te crypto are upstarts with questionable track records. But five-year-old Robinhood has raised $176 million from top investors including Andreessen Horowitz, Index, and NEA that now value the company at $1.Three billion. There’s clear long-term benefit to rolling up crypto traders and using the feature spil a wedge to get them to hold money with Robinhood where it earns rente, and pay for the Robinhood Gold premium tier for $6 to $200 a month that lets them borrow inbetween $1,000 and $50,000.
Here’s how Robinhood Crypto works. You can instantly transfer up to $1000 from your connected bankgebouw account (more if you have a Gold membership), with extra funds coming overheen slower ACH transfer. For smaller traders, that could eliminate the annoying delays on other platforms that can make you miss a low price you want to buy up. The entire Crypto section of Robinhood is styled with an 80s Tron vormgeving to denote the 24-hour trading window, compared to its day and night themes for when traditional stock markets are open or closed.
When you 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 improve to score better prices overheen time. To tegenstoot market volatility, Robinhood puts a “collar” around your trade so if it can’t execute it at close to the estimated price, it waits for the price to terugwedstrijd or lets you know.
And te case the price of a coin skyrockets or plummets, you can place limit orders to set a price where you automatically buy or sell. The utter list of coins you can track is Bitcoin, Ethereum, Bitcoin Contant, Litecoin, Ripple, Ethereum Classic, Zcash, Monero, Dash, Stellar, Qtum, Bitcoin Gold, OmiseGo, NEO, Lisk, and Dogecoin.
Only BTC and ETH will be available for trading when that rolls out to flaps of users beginning te California, Massachusetts, Missouri, Montana, and Fresh Hampshire te February, however more will be added. “We’re utterly selective about the cryptos wij’re making available on the platform” says Tenev. “We’re introducing those very first because thesis are the most mature coins that people are trading thesis days. Numerous times people have proclaimed them dead and they’ve come back stronger than everzwijn.”
To back-up the fresh Robinhood Crypto feature, the company is adding fresh two-factor authentication options including integrations with authenticator apps to ensure people don’t get their wallets stolen and dumped. “There are several senior world-class people that wij’ve hired recently that are building the system in-house” says Tenev. Still, the stir paints a giant target on Robinhood’s back. If the company gets hacked, or individual users get robbed, it could tarnish the fintech startup’s reputation.
Request for the product wasgoed clear, however. 100,000 of Robinhood’s users were regularly seaching for crypto pricing and trading te its app, and 95% of those surveyed said they’d invest te cryptos if the product supported it. Robinhood even had to send a cease-and-desist to “Cobinhood”, a rivaling crypto trading app that cribbed its name and raised $Ten million ter an ICO.
Judging by the choices of two top startups, you could see this week spil a sign of cryptocurrency’s shifting purpose. Yesterday Stripe eliminated Bitcoin spil a payment option on its podium, and now Robinhood is adopting trading. “People are thinking about cryptos less from a payments standpoint and more from an assets investment standpoint” Tenev explains.
Robinhood Crypto features a Tron-style 80s vormgeving motif
Spil for whether he’s personally invested te the crypto toneel, Tenev admits “I’m a dabbler, certainly, but I wouldn’t say that it’s all that significant.” But it’s a good gezond for his business, which used a lean engineering team to druppel stock trading fees to zero while competitors like Scottrade and E*trade can charge overheen $6 vanaf trade to voorkant their marketing and expansive retail footprint with gigantic overhead. Now Robinhood has treated $100 billion te transactions, saving its users overheen $1 billion ter fees.
“[Cryptocurrency] puts power that’s historically bot held by financial institutions ter the palms of the people. I think that lines up directly with Robinhood’s mission to democratize the financial system” Tenev tells mij, concluding “We’re an established company and wij can treat it”. The confidence to burst into the wild westelijk of crypto could either waterreservoir his startup with a massive security fail or greatly boost its traction by alligning with what’s become a cultural phenomenon.
Disclosures: The author of this article possesses puny positions ter Bitcoin and Ethereum, and knows Robinhood’s founders from collegium.