As anybody who hasn't been hiding under a rock knows, the Robinhood trading platform's main claim to fame is that they don't charge fees. This applies across the board, whether you're trading stocks, ETFs, or crypto, Robinhood Financial and Robinhood Crypto both do not charge fees or. They are commission free.
So when it comes to trading, you'll save a few dollars and cents per trade. But is Robinhood a better choice when it comes to fees compared to competitors like Coinbase? How do other trading platforms work vs Robinhood?
The Robinhood Cryptocurrency Exchange
Robinhood is such a broad platform with a massive following and user base that it can facilitate trades for a wide range of securities. They have Robinhood Financial and Robinhood Crypto, which are both wholly owned subsidiaries of Robinhood.
Robinhood is a trading platform that many use to buy and sell ETFs, securities and stocks. But recently they added the option to buy and sell cryptocurrencies. While they aren't a traditional cryptocurrency platform, they do offer 7 coins for investors.
Users can buy and trade stocks as well as cryptocurrencies with Robinhood. It's a very easy-to-use platform accessed primarily through mobile apps.
From the convenience of your mobile phone, you can buy and sell securities from this easy-to-use platform. It doesn't take a rocket scientist to figure out how to use the platform to buy ETFs, stocks, and crypto.
With Robinhood Crypto, users do not have access to a personal crypto wallet, more on this later.
What Makes Robinhood Fees Different from Other Cryptocurrency Platforms?
Unlike other crypto platforms, there is no such thing as Robinhood crypto fees. It is a 100% free platform. You don't have to worry about Robinhood crypto fees whatsoever because you can buy and sell crypto as many times as you want without the typical 3–4% fee charged by other comparable platforms like Coinbase.
Vs Robinhood, many exchanges can't compete when it comes to fees.
Whether you are a volume trader or who is just getting used to crypto trading, Robinhood is a great platform to start with.
There are other more powerful trading systems available on an app as well as desktop format, but if you are just starting out or you know what you want to do, there's no need to worry about fees. This platform has you covered.
Just what can you do with this platform? Well, the Robinhood app allows users to invest in ETFs, stocks, securities, and Robinhood Crypto in the United States. Whether you're looking at over-the-counter or New York Stock Exchange securities, you can do so from the comfort and convenience of your Robinhood app.
Buying crypto is a safe process with Robinhood, but crypto trades could always involve a potential loss. So it's important to find the right crypto exchange for you.
How Many Cryptocurrencies Are Supported by the Robinhood Platform?
Currently, Robinhood offers seven of the biggest cryptocurrencies currently available on the market. Led by Bitcoin, you can buy and sell Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Ethereum Classic, and Litecoin.
Keep in mind that this number will probably continue to grow as some secondary cryptocurrencies grow in market capitalization and popularity like Bitcoin did.
As different coins are added, the options to buy crypto (and sell) the exchange will continue to grow.
How does Robinhood Crypto work?
Whether you’re buying or selling crypto, an estimated price is provided on the order screen of the Robinhood app. This amount is based on various exchanges, market centers, and trading venues, allowing Robinhood to decide on the best price they will offer.
Robinhood customers are also protected from the volatility of the market through trade collaring. Your order will not be processed if the current price is lower than the last trading price by a set percentage.
You can also set limit orders so your trade is executed once a crypto hits a certain price.
What is the Difference between Robinhood Financial and Crypto?
Both Robinhood Crypto and Robinhood Financial are wholly owned subsidiaries of Robinhood Markets (Robinhood). They added Robinhood Crypto trading platform in early 21018 and it has been growling ever since, both by the number of users and the amount of cryptocurrencies supported.
The Robinhood Gold Premium Account
Using this premium account gives you access to special features.
For example, you can get Level 2 data for market platforms as well as for your professional research needs. Also, if you want to get your cash quickly, transfers are instantly sent to you if you are sending anywhere from $5,000 to $50,000.
Compare this with the normal $1,000 threshold for a regular account. You get a lot more cash faster.
Is the Robinhood Gold Account Worth It?
The great thing about the Robinhood Gold account is that it boosts your purchasing power and allows you to leverage your money through borrowing. If you're not interested in buying on margin, the standard Robinhood app should be enough to cover your needs.
Another great thing about the Gold Account is that you'll have quick access to your cash up to the amount of the Gold Tier limits. Extra funds quickly arrive after the regular settlement period.
All throughout, you don't have to worry about fees with Robinhood crypto because there are none.
How does Robinhood make money from their services?
Robinhood does not charge any commission and other fees for their trading transactions, at least not directly. That's right, it's technically commission free.
While this is one of their most attractive features, there are “invisible” fees to generate revenue. You will notice this in their spread, which is the difference between the estimated buying price and the estimated selling price.
Robinhood has a wider spread compared to other crypto trading platforms. Gold account users are also charged a $5 monthly fee after their 30-day free trial.
Is Robinhood Safe?
The answer to this question is a resounding yes! The Robinhood brand is mostly well-trusted and respected besides 2021's snafu.
Robinhood Crypto is not FDIC insured or protected by SPIC like the securities trading. Securities trading is offered on Robinhood Financial.
Robinhood funds are protected. In data form, the funds for securities are covered up to $500,000 in total. If you're making a cash claim, you're covered up to $250,000. When it comes to cryptocurrency trading, safety is always important and remembers that all investments involve risk and loss.
Although some single account users have reported issues in terms of data security, there has been no large-scale hacking in any Robinhood service to date. In any case, it is highly recommended for the app user to beef up their account security by enabling biometric and PIN codes in their mobile devices.
A Quick Note About Owning Crypto Through Robinhood
Do you really own cryptocurrency through the Robinhood platform? Sadly, no.
You don't have access to your actual crypto wallet with services like Robinhood. This implies you won't be able to withdraw your funds as cryptocurrencies and use them as such. It’s only just an exchange platform. It’s like, you have money stashed safely in a vault, but you don’t have the keys to open and take the money out of it.
How Much Do You Need to Start Investing with Robinhood?
You can buy as little as a dollar's worth of crypto and gradually increase your holdings. There's really no requirement to buy or sell a complete single cryptocurrency on Robinhood crypto. This is a big appeal to many people to begin to trade crypto.
This means that you can buy 1/1000 of a Bitcoin. There's no minimum size for crypto except for Dogecoin, which requires a minimum of one Doge. This is great news for people who don't have a huge amount of cash to buy one complete Bitcoin. You can buy a very small fraction of it using Robinhood with no problem.
Conclusion: Other Crypto Platforms vs Robinhood
Using Robinhood is easy for both veteran and newbie crypto traders. Although I'm sure experienced traders would prefer more advanced exchanges vs Robinhood.
While you don't have direct access to your wallet with this platform, the main advantage that Robinhood brings to the table is that you don't have to worry about crypto fees.
And you can still withdrawal to your bank account once you have sold your crypto. All commission free.
As a crypto trader myself, I recommend a more advanced platform for those who need direct access to their wallet.
But many other trading platforms may be too complicated for some vs Robinhood, so make sure to do your research when buying and selling crypto.