The Robinhood app has announced that customers in four US states will be able to buy and sell Bitcoin (BTC) and Ethereum (ETH). The four states that can use crypto on the app are California, Massachusetts, Missouri, and Montana. This will expose many new people to cryptocurrencies and make them simpler to buy.
Why should Coinbase be worried? Robinhood will offer trading of digital assets commission free. Coinbase charges 1.5 to 4% fees when buying cryptocurrencies, this will convert into large savings for Robbinhood users. This is most likely why four million users signed up for the Robinhood Crypto waiting list in the first five days of its announcement to add crypto in January.
Robbinhood has only added BTC and ETH trading but they are working on adding at least 16 other cryptocurrencies. As of now Robinhood users can track the price of: Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ripple, Ethereum Classic, Zcash, Monero, Dash, Stellar, Qtum, Bitcoin Gold, OmiseGo, NEO, Lisk and Dogecoin. There has been no news on when other assets will be added.
Simple, the Robinhood app charges subscription fees for users who trade with money borrowed from the platform. They also earn money off of the interest on the money that app users have stored in their accounts. This model lets Robinhood offer 0% trading fees for stocks and cryptocurrency and could be a problem for other stock and crypto platforms.
Robinhood entering into the world of cryptocurrency could bring in a lot of new investors. The Robinhood app will make it easier and cheaper for new investors and allow them to become familiar with cryptocurrencies. Widespread adoption is needed for cryptocurrency to become the groundbreaking innovation that it intends to be.
New to crypto? Join Coinbase with my link to get $10 of free bitcoin when you buy or sell $100 worth of Bitcoin.
I am not a financial adviser nor is any content in this article presented as financial advice. The information provided in this blog post and any other posts that I make and any accompanying material is for informational purposes only. It should not be considered financial or investment advice of any kind. One should consult with a financial or investment professional to determine what may be best for your individual needs.
