Robinhood, the app that lets you make zero-fee stock trading and tracking, is moving into a new market: Cryptocurrencies. Next month, users in select US states will be able to buy and sell bitcoin and ethereum without having to pay transaction fees, with support for more currencies coming later.
Obviously, no-fee trading is a valuable advantage Robinhood trading holds over other exchange sites; Coinbase, for example, charges 1.5 percent to 4 percent. This isn’t a ploy for more revenue: The app-based service hopes this will lure more users to its platform.
“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” Robinhood co-founder Vlad Tenev told TechCrunch. “The value of Robinhood Crypto is in growing our customer base and better serving our existing customers.”
Cryptocurrency prices are notoriously volatile. To counter that, Robinhood Crypto gives users an estimated price, and once users confirm a buy or sell order, they scan a gamut of trading venues, exchanges and market centers to find the lowest offer, TechCrunch explained. To account for wild price fluctuations, the service puts a ‘collar’ around your order; If it can’t find a price within this margin, it will wait until one surfaces to execute your order or inform you.
Once February rolls around, users will be able to trade bitcoin and ethereum in California, Massachusetts, Missouri, Montana and New Hampshire, though Robinhood Crypto will expand to more states ‘soon’ according to a press release. After launching with bitcoin and ethereum, Robinhood Crypto will eventually support over a dozen other currencies. These include: Bitcoin Cash, Litecoin, Ripple, Ethereum Classic, Zcash, Monero, Dash, Stellar, Qtum, Bitcoin Gold, OmiseGo, NEO, Lisk and Dogecoin.
Users will be able to trade cryptocurrencies around the clock on Robinhood, and the platform will allow you to instantly transfer up to $1,000 from your bank to your account expressly to buy cryptocurrency. (Any funds over that amount will follow the slower ACH transfer process.) User will also be able to monitor and track currencies, as well as set up limit commands to automatically buy or sell if one hits a certain number.