Monday, December 5, 2022

Trading App Robinhood to Launch Cryptocurrency Trading With 16 Different Assets

Trading App Robinhood to Launch Cryptocurrency Trading With 16 Different Assets

Robinhood, the stock trading app popular for its commission-free trades, has announced it is launching support for 16 cryptocurrencies. Users will be able to buy and sell any of these assets, also free of trading fees or commissions. This is in contrast to other USD-to-crypto gateways such as Coinbase, which charge fees on every transaction.

Also read: Japan’s Coincheck Halts Trading and Withdrawals as Hack Rumors Spread

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Robinhood Aims to Change the Financial World Again

Robinhood started as a mobile phone-only stock trading app and broker. The service was revolutionary because it allowed for investors to buy and sell stocks from major U.S. stock exchanges like Nasdaq, completely free of commissions. This is in conrast to other online discount brokers, which typically charge at least five or six dollars per trade, if not much more.

Robinhood allowed for an entirely new class of investor to pick up investing, either casually or seriously. Since its launch, the company has released a beta of its desktop client, has allowed for free moving of shares from other brokerages to Robinhood, and has also offered margin lending, options, and other advanced features.

To prevent daytraders from manipulating the system in a negative way, the system limits most users to no more than three day trades in a single 24-hour period. If this amount is exceeded, then the account is marked as a pattern day trader and is negatively impacted.

Instant Credit to Start Crypto Trading

According to official sources, the goal of Robinhood in this case is to allow investors to buy and sell from a pool of selected cryptocurrencies, much in the same way that stocks are purchased on the app today. The key difference is that cryptocurrency trading will be open 24 hours a day.

Here’s a complete list of the 16 assets Robinhood users can trade:

  • Bitcoin
  • Ethereum
  • Bitcoin Cash
  • Litecoin
  • XRP
  • Ethereum Classic
  • Zcash
  • Monero
  • Dash
  • Stellar
  • Qtum
  • Bitcoin Gold
  • OmiseGo
  • NEO
  • Lisk
  • Dogecoin

The official Robinhood blog post announcing the change outlined how deposits will work. For standard accounts, investors can get an instant deposit credit of up to $1,000 USD into their account within seconds. The actual withdrawal from the linked bank account occurs several days later.

If traders want access to larger amounts of instant funds, they may be able to do so through a subscription service that comes with a low monthly fee. Crypto assets will appear right alongside traditional financial assets. The sale of cryptocurrencies will take a few days for an ACH deposit to hit investors’ accounts.

Are Users Trading Real Tokens or Just Speculating on Price?

What we do not know, however, is whether or not Robinhood will allow investors to use it like a wallet. For example, will it allow them to send and receive assets outside of the platform, or will it only allow them to speculate on them?

If Robinhood does not allow users to send and receive cryptocurrency, then its positive impact on the market could be greatly minimized. If, however, the platform allows for the buying, sending, and receiving of digital assets all with no fees, this could spell the end of fee intensive services like Coinbase — that is, unless they greatly change their fee structure to be more competitive.

It is also possible that full wallet features may be coming at a later date, and might not be available right away. At this point, all we can do is guess. The official blog post did state that additional features would be rolled out “gradually in waves” to residents of California, Massachusetts, Missouri, Montana, and New Hampshire, with “more states soon”. There is no indication yet of this being available for those outside of the U.S.

The website is currently allowing for people to sign up for early access. When we checked the site, it said the number of people in line was just over 360,000 — if true, that indicates significant interest.

What impact do you think this will have on the market? Let us know in the comments below.

Images via Robinhood

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