Robinhoodwill allow the trading of cryptocurrency, like Bitcoin and Ethereum on their platform, without transaction fees beginning in February for customers in California, Massachusetts, Missouri, Montana, and New Hampshire.
With cryptocurrency skyrocketing over the past year, transaction fees have a been a thorn in the paw of traders. Some apps that house crypto coins like Coinbase charge a 1.5-4 percent fee per transaction and sometimes more if the network is saturated with activity. Expect to see a portion of Coinbase’s 13 million users to dip their toe in Robinhood’s pool.
Since Robinhood does not charge its users a commission fee, they accrue revenue through trading fractional shares and having users upgrade to their premium services like Robinhood Gold.
The co-founder of Robinhood Vlad Tenev commented: “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.” Tenev continues, “But it could dramatically increase our growth.” As of right now Robinhood has 3 million users and is valued at a whopping 1.3 billion dollars.
Most mainstream financial institutions have maintained a cautious position.E-trade and TD Ameritrade have offered access to bitcoin futures, but Robinhood represents the first established non-crypto related company to break into the crypto space.
As of today, users can view price alerts from 16 different coins. They are the following: Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash, Bitcoin Gold, Ethereum Classic, Zcash, Dash, Monero, Stellar, Lisk, Qtum, OmiseGo, NEO, and Dogecoin. However, only Bitcoin and Ethereum will be available for trading at first when Robinhood opens the gates in February and the rest should follow shortly after.