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Robinhood, one of the unicorns of Silicon Valley, and the app that targets millennials to trade zero-fee stocks, has now set its eye on the hottest market:cryptocurrencies.
This is a hugely positive news for US investors, since the option to trade zero-fee cryptos will be limited to certain states. Robinhood users will be able to trade both Ethereum and Bitcoin from just next month. With time, the company plans to roll out the service to more cryptocurrencies.
The unique business model of Robinhood allows it to have a competitive advantage over other crypto exchanges such as Coinbase, Bitfinex and others. The co-founder of Robinhood, Vlad Tenev told TechCrunch:
“The value of Robinhood Crypto is in growing our customer base and better serving our existing customers.”
While other crypto exchanges “suffer” from users constantly complaining from large fees, Robinhood will explore the sweet spot of zero-fee crypto transacting.
According to the popular news website, Endadget:
“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.”
According to press, Robinhood users will be allowed to transfer up to $1,000 directly from their bank account to their Robinhood Crypto one and trade immediately. As with any regular online exchange, users will be able to track their orders and put limits.
The following states will be able to use the Robinhood Crypto option right from next month: California, Massachusetts, Missouri, Montana and New Hampshire. While the company will first offer Bitcoin and Ethereum, the cryptocurrencies to follow will be:OmiseGo, Bitcoin Gold, Bitcoin Cash, Lisk and Dogecoin and more.