Robinhood Rolling Out Cryptocurrencies! [Details]

When we picture stock traders, we usually imagine sharp suited men sitting in tall buildings, sipping on expensive scotch and with patience of a chess player, uttering, “Sell” or “Buy” quietly to subordinates.

Robinhood changed all that. With the mobile app ordinary people like you and me could (and can) trade in stocks and ETFs without the confusing complexities of the financial world. The platform has been warmly received and is one of the best investing point for millennials.

Carefully studying the large gap between an ordinary man and people with specialized knowledge of stocks and exchanges, Robinhood was able to find a very large niche that was practically unexplored by any other firm and it filled the vacuum quickly.

Five years down the road, it is evaluated at $1.3 billion y DST global.

Aspiring to be the market leader for the masses, Robinhood clearly knows what it is doing and has recently announced it will start trading in cryptocurrencies. It is one of the latest platforms to turn towards digital money. Starting from February, people will be able to trade in Bitcoin and Ethereum.

An apt name, Robinhood was launched with a mission in mind: Bring the trading market to the masses. True to the legendary name, riches once reserved for the elite (and adept at trading) was accessible to everyone.

Brainchild of Standford University students, the app was launched in 2013 and was an instant hit. The app was designed keeping mind that the users will be average people who do not have financial backgrounds. This led the mobile app to be simple and intuitive. It allows users to trade stocks and ETF easy. The platform had collected more than $s million before it was even launched.

SERVICES

As Robinhood is made to be easy, it deals only in stocks and ETF and limited securities ignoring other forms of trades like futures and mutual funds. This allows Robinhood to have a needle focus and users are not confused or overwhelmed. Current services offered are:

• Stocks and ETF.

• US listed foreign Securities.

• Euro Stocks.

• Canadian Stocks.

• Options.

• Cryptocurrency Trading (available February 2018)

FEES

Robinhood is built around a concept of providing the cheapest trading services to its users. It does this by tapping in the high frequency trading. Before working on Robinhood, Vlad Tenev and Baiju Bhatt, the founders, had worked on high frequency trading platforms for financial companies in New York. They realized that such activity involved little to no trading fee by traders and firms.

Keeping in view this fact, the trading fee is practically zero on the platform. Security and stock trading fee is also kept minimum in a flat monthly fee:

• Stocks and ETF. FREE

• US listed foreign Securities. $50

• Euro Stocks. $35

• Canadian Stocks. $35

• Options. $6.95 per contract

THE APP

Robinhood is currently available on iOS and Android platforms. You will find many Robinhood app review on the internet, some praising it and some describing it as minimal. To be honest, it is designed to be extremely simple, yet has good aesthetics and is user friendly. The app does not allow you to do much research in stocks, but gives latest news, has real time stock prices, allows to place trades and deposit (or withdraw) cash from your account.

You have to keep in mind that the app and the platform are designed for people who need their tools and resources in one place. This is not for mid and serious level investors.

PC INTERFACE

Considering the positive response from users, Robinhood also has plans to launch a web based version of the app for users who prefer to use PCs or laptops. More than 650,000 people have already applied and are on the waiting list for the web version.

The new platform will be advanced and more complex than the mobile version, but keeping in line with the philosophy of the organization, it may not have all the options that other trading platforms offer. You will still need to turn to other sources to do your researches.

WEBSITE

Although Robinhood will integrate its crypto trading into its regular app, the platform has made a dedicated corner for its launch on its website that has a completely different look and color scheme. You will find basic information on how to invest and trade, which is pretty similar to its regular stock trading.

USERS

The trading app has more than 2 million users and the waiting list is in the thousands. The large number of waiting list is due to AML (Anti Money Laundering) and KYC (Know Your Customer) regulations.

Users are divided into two categories: Regular and Gold. Gold members have higher trading limits, borrowing, and more trading hours.

INVESTMENT SAFETY

Since Robinhood is a brokerage firm at its core, it is registered with FINRA (Financial INdustry Regulatory Authority), a private corporation that acts as a self-regulated authority. Robinhood is also a member of SIPC (Securities Investor Protection Corporation), which is a US government mandated nonprofit, member-funded organization.

In compliance with SIPC regulations, each member of Robinhood has an insurance on his investment of up to $500,000. Additional insurance arrangements have been made by Robinhood through Loyd’s and other London based institutions.

APP SECURITY

The trading app is secured with a two factor authentication protocol. Apart from the standard username and password that has to be input to access your funds and trades, the app can also be paired with your mobile number. Through this, whenever you login, you will be sent a code through SMS which you will need to enter in the app to access it.

This ensures that even if your credentials are stolen, the thief cannot access your funds since the SMS code will be sent to your registered number.

Going one step further, the app also supports fingerprint login. If your mobile supports fingerprint ID login, you can setup to access the app by your fingerprint, making the app nearly impossible to hack into.

ROBINHOOD CRYPTOCURRENCIES

As a trading platform involved in high frequency trading, it was only a matter of time that Robinhood would enter the cryptocurrency scene. The demand was also there. Nearly a 100,000 users were actively searching news on cryptocurrencies on its app and a survey revealed that more than 95% of its users had invested in cryptocurrencies.

On the decision of trading in adding cryptocurrencies as trading on the platform, Tenev said that cryptocurrencies put power that’s historically been held by financial institutions in the hands of the people. I think that lines up directly with Robinhood’s mission to democratize the financial system

Crypto trading will start in February this year from limited states (California, Massachusetts, Missouri, Montana and New Hampshire in the first phase) and will gradually expand to others.

If you sign up for the crypto trading with a referral, you and the referring party, both will get some free stock. Interested? Sign up using here.

TRADING

Trading on the app is very simple and straightforward:

• Transfer money from your connected bank account.

• Place a buy or a sell order.

• Robinhood gives you an estimated price of the trade and searches for the best one available on a range of exchanges.

• If a trade price available is not close to your estimated one, it will hold transaction until the price is better matched or asks you if you would like to trade at the currently available price.

• Limit option allows you to automatically sell if a price of coin rises or falls beyond your defined threshold.

• Withdraw your funds after selling, or simply the coins after buying. Withdrawal of coins will be subjected to mining and transaction fee though.

• Minimum order to buy Bitcoin on Robinhood is $0.10 and for Ethereum it is $0.01 through fiat.

• For buying order through cryptos, minimum 0.00001BTC or 0.001 ETH is required.

For users who do not have the time or the understanding of day trading of crypto coins, this is the best solution for them.

Normally, a medium level investor will have accounts in multiple exchanges, spreading his investment. He or she will need to constantly monitor all the exchanges, making it hectic. Robinhood solves this problem by finding the best possible price for you.

One drawback evident here is that although you can add funds in shape of USD and withdraw too, when it comes to cryptocurrencies, you can only withdraw what you trade and buy. Adding coins from another wallet or exchange is not allowed at the moment. The reason is stated as to counter black money being traded on their platform.

FAQ

The Frequently Asked Question of Robinhood is fairly large and yet concise at the same time. The organization has thought up of every possible question a new user can ask and has explained all in brief, clarified answers. The FAQs include basic buying and selling, trading- and even declaring your crypto currency investments in your tax retuns.

PROS

• Trusted platform.

• Trade Stocks, ETFs and Crypto currencies from one app.

• Instant access to funds.

• Unlike stocks, cryptocurrencies can be traded 24 hours.

• Crypto trading is free.

CONS

• Initially five states are supported.

• Only available for US residents.

• Only Bitcoin and Ethereum available currently.

• Trading means hot wallet for your coins. Increased chance of being stolen in a direct hack.

CONCLUSIONS

Robinhood, although an established and well-reputed firm for trading of stocks, is new in the cryptocurrency field. The firm has a well experienced team which knows the weaknesses and strengths of trading. Unlike many other platforms (old and new), it has made a wise decision to start only with trading and not launch its own coin and ICO. This is because it does not need to. Trading is already being done and all it had to do was add crypto trading option. This allows it to focus more on trading than setting up and maintaining the infrastructure for its own coin.

The crypto trading is fairly simple and the only tool for studying trading prices is the news section, which is limited for normal users. Robinhood has kept it simple as its niche is small investors with basic knowledge.

Overall, the trading of cryptos seems transparent enough and if the track record of normal stock trading is to be used as a standard of quality of service, this will be one the best cryptocurrency trading platforms in 2018.

If you are interested in trading Cryptocurrencies and or traditional markets with Robinhood use my link below and we will both get a free stock! Thanks in advance.

https://share.robinhood.com/rafaels128

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