Starting February, Robinhood, a commission-less stock trading application will let its users trade Bitcoin and Ethereum without the dreaded transaction fees. Compared to major exchanges like Coinbase, Binance, and others that charge fees from 1.5% to as much as 4%, Robinhood will not charge any transaction fees whatsoever, which means traders will make more money with their trades. Additionally, Robinhood will also enable users to track prices, be updated with news, and put up alerts for Bitcoin, Ethereum, and 14 other crypto currencies including Ripple and Litecoin.
According to Vlad Tenev, Robinhood’s co-founder, they plan to operate this trading business on a breakeven basis and that they are not considering profiting from crypto trades in the future. He adds, “The value of Robinhood Crypto is in growing our customer base and better serving our existing customers.”
As of today, Robinhood has an estimated 3 million users. With the rollout of this announcement on February, the trading app could easily expand its customer base by tapping the huge market of crypto traders. By increasing access to cryptocurrencies, Robinhood could also potentially boost the cryptocurrency market prices, and further legitimize cryptomarket acceptance.
Compared with many crypto trading startup businesses, which often have questionable backgrounds and track records, Robinhood is a trading giant that is now valued at $1.3 billion. As of the moment, Robinhood has processed $100 billion worth of transactions, which means users were able to save about $1 billion in fees. Come the start of cryptocurrency trading, the company foresees a significant increase in trade volume from traders who will see value in fee-less transactions.
Robinhood’s move to include cryptocurrencies in their trading app was a result of overwhelming demands from their current users. About 100,000 Robinhood users regularly searched for cryptocurrency prices in the app, and about 95% of those surveyed said that they would consider investing in cryptocurrencies if Robinhood supported it.
Once the service rolls out, here is how crypto trading at Robinhood will work. Instantly transfer up to $1000 from any connected bank account. Amount is higher if you are a Gold member. Additional funds may come through the slower ACH transfers. Small time traders and day traders can benefit from instant transfers, as their trading strategies require buying in at specific short term dips. After placing a buy order or a sell order, Robinhood estimates the price, connects to various exchanges and market centers aiming for the lowest prices, and uses its unique features to improve trading over time.
