Quintacorn Robinhood Rolls Out Their Free Crypto Trading
It has been a good year for Robinhood with it rolling out the Coinbase killer helping the fintech grow 4X in a year.
It has been a good year for Robinhood with it rolling out the Coinbase killer helping the fintech grow 4X in a year. It was brought to California, Massachusetts, Missouri, and Montana the zero-fee trading of Bitcoin and Ethereum, while other states are on the waitlist. It enables the users to track 16 crypto coins including BTC, ETH, Litecoin and Ripple along with traditional stocks without any transaction commission.
It helps undercut the US fees ranging from 1.5 to 4 percent in Coinbase. While around one million waited in the first five days after it was announced, currently it has four million total registered users. The lack of fees is set up to lure veterans as well as rookie crypto investors even though it, lacks support for trading in the Coinbase. Without charging per trade, Robinhood earns money from the interest of money in the user's accounts along with the Robinhood gold service. Users borrow between $1000 and $50,000 to trade for a monthly subscription of $6 to $200.
Adding options and web trading is what has caused the Robinhood Gold to earn success and the new Robinhood Crypto attracted $350 million series D round led by Russian fund DST Global and thereby confirming the value at $5.6 billion, bringing the total funding to $526 million. This means the funding is up from $110 million series C at a valuation of $1.3 billion raised last year.
This valuation will surely put pressure on the CEOs to keep the Robinhood growing and build out a subscription, and interest revenue invading the space of competitors. They include traditional brokers like Scottrade and E*Trade charging $7 or more per trade for crypto-specific exchanges similar to Coinbase and news sources like CoinDesk.
The increasing societal and regulatory skepticism about the cryptocurrencies curtailing investments from the public could risk Robinhood a down round. It’s the focus on younger and less wealthy investors not accredited to make it vulnerable to the crypto backlash, in case users see the space too volatile or scammy for amateurs. The cybersecurity concerns surely make users bail on the app for the fear of the cryptocurrency being stolen.
Robinhood is set to expand beyond 3 million users as it is not a primary business like Coinbase and related apps but uses crypto trading as a loss leader. This simplifying of trading and tracking encourage Bitcoin and Ethereum. It combines the traditional stock, ETF and options trading on a single app legitimizing cryptocurrency craze among users. Cross-pollinating among the two trading worlds helps attract more people into the crypto scene.
Robinhood has tasted success raising $176 million from top investors, valuing it at $1.3 billion. Robinhood crypto works in the following way. The transfer of up to $1000 from your bank account and additional funds over the slower ACH transfer helps the users. Small traders can eliminate annoying delays thereby missing a low price to buy up. It is designed with an 80s Tron design, denoting a 24-hour trading window. Compare the day and night themes when the stock markets are open or closed.
On placing a buy or sell order, Robinhood gives an estimated price, connecting trading venues, exchanges, market centers finding the lowest price using those economies to improve and score better prices over time. It puts a collar around the trade and if it can’t execute it at an estimated price, it waits for the price to return to counter market volatility.
In case the price of a coin fluctuates, you can place limit orders where you automatically buy or sell at a set price. The coins available for trading include Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ripple, Ethereum Classic, Zcash, Monero, Dash, Stellar, Qtum, Bitcoin Gold, OmiseGo, NEO, Lisk, and Dogecoin. But only BTC and ETH are available when it rolls out adding more in the recent future.
To prevent the possibility of wallets being stolen and dumped, Robinhood crypto comes with two-factor authentication included in integrations and authenticator apps. This move is in the direction to prevent the chance of the company gets hacked or individuals are robbed, the image could get tarnished posing grave danger.
The product is in high demand, as almost 100,000 users search for the pricing and trading of cryptos in its app. Amongst the 95% surveyed, they invested in the cryptos supported by Robinhood. They had served a cease-and-desist to ‘cobinhood’ a competing crypto trading app that raised $10 million in an ICO with a cribbed name. This directs attention to the great demand it enjoys amongst crypto traders.
The idea behind cryptos is moving from a payment standpoint to that of assets investment standpoint, meaning, cryptocurrencies are shifting purpose. While stripe removed Bitcoin as a payment option, Robinhood is adopting trading.
Robinhood fits well with a lean engineering team, dropping stock trading fees to zero, while its competitors like Scottrade, E*Trade charge over $6 per trade covering the marketing and retail footprint with a huge overhead. By now, Robinhood has handled $100 billion in transactions saving over $1 billion in the form of fees for its users.
Cryptocurrencies put the power earlier held by financial institutions into the hands of people. Robinhood is all set to democratize the financial system, establishing it into a well-managed company. The freshness and confidence with which it penetrates the crypto scenario can end up with a massive security fail or a great boost for its traction aligning with a cultural phenomenon.
The crypto needs to be more serious as to how crypto education is taken care of. The fact that it is still in a testing phase, with a small number of users, the feed of crypto news keeps people informed about the market movement. The crypto journalism space comes with integrity violations, as well as reporters with questionable expertise. Robinhood could probably attract investors if it built a truly neutral crypto news source.