Here Comes The Robinhood App Launching Cryptocurrency Trading In 5 States

All About Robinhood

Hereafter the investors are now looking to buy and sell cryptocurrencies in California, Massachusetts, Missouri, Montana, and New Hampshire being able to avoid cryptocurrency exchanges. Therefore, the mobile app Robinhood has come to be customarily focused on stock trading, which was formally launched cryptocurrency trades in these five states according to Coindesk. Therefore, the service is viewed to be available through the new Robinhood Crypto platform as the launch of an app-based trading platform may inspire change in the traditional cryptocurrency exchange world. 

How Can It Track 14 Cryptocurrencies?

In the current scenario, it is found that while the app called Robinhood allows users to only buy and sell bitcoin and ether that are the two most popular cryptocurrencies as well as the two largest digital currencies in the world by market cap, allowing interested investors to thereby monitor the prices of more than a dozen other digital currencies through the app. While it comes to be true, there are other trackable currencies including bitcoin cash, XRP, Ethereum Classic, Litecoin, zcash, monero, bitcoin gold, and dogecoin, the meme-turned-cryptocurrency.

Thereby digital currencies are observed to have bombarded with media attention over the year but remain to be a niche area for traditional investors as Robinhood hopes to positively change that. It was then mentioned to launch cryptocurrency trading and tracking as the app’s developers aim to mainly bring the new industry to a larger potential audience of investors.  

The 'Zero-Commission Trading'

Moving on it was stated in the Robinhood website that the service plans to offer zero commission trading for its customers and as the company revealed, they have reached 4 million users ad well over $ 100 billion in a transaction on their brokerage platform leading to over $ 1 billion in commissions saved in equity trades and with the release of Robinhood Crypto they’re continuing their mission of making the financial system work for everyone.

Consequently, it was noted that besides the launch of the cryptocurrency trading platform that is within the Robinhood app, the developers also announced the launch of the Robinhood Feed which is a social media platform that enables investors to discuss cryptocurrencies and view news stories that will be updated in real-time. Thereafter so far the feed has not been released to the broader Robinhood app and is only available to a limited subset of the user base. 

How Does Robinhood Make Money?

The truth is that Robinhood is not transparent about how it makes money as the Robinhood markets are a discount brokerage offering commission-free trading through its website and mobile app whereby the company generates significant income from payments for the order flow, a common although controversial practice where a broker receives compensation and other benefits for directing orders to different parties for trade execution. Therefore, as Robinhood refers to this revenue as rebates from market makers as well as trading venues, the payments come to be negligible for small retail trades, a company that is found to direct billions of dollars in trades to market makers that can earn substantial amounts as the independent analysis suggests that payments for order flow generated an estimated $ 69 million in revenue for Robinhood up 227% and accounted for more than 40 percent of its overall revenue. 

Therefore there are other sources of revenue that include a $ 5 monthly fee for optional membership to Robinhood Gold giving the client access to margin loans and investing tools, interest on uninvested cash as well as lending stocks purchased on margin and fees on purchases using the company’s debit card.  

What Is Robinhood's Industry?

Presently Robinhood competes in the nascent but fast-growing fintech industry where traditional and new players have invested billions of dollars to move investing, banking, money management, and other financial services to digital platforms as Robinhood has announced its intention making zero commission trading the centerpiece of its business offering. Thereby it happens to be that it would achieve this by just keeping operational and administrative expenses low whereas much of the brokerage industry had followed suit in offering zero commission fee structures.

It is finally that Robinhood supports trading of more than 5,000 stocks including most equities and exchange-traded funds listed on US exchanges, options contracts, cryptocurrencies such as the bitcoin and Ethereum as well as the American Depository Receipts for more than 250 globally listed companies. 

The Fundraising And Financials

In the present age, Robinhood has raised around $ 280 million thereby in a Series F funding round valuing the company at $ 8.3 billion and Sequoia Capital has led the round as the new and existing investors included NEA, Ribbit Capital, 9 Yards Capital as well as Unusual Ventures. it was then that Robinhood completed its Series E round raising $ 323 million at a $ 7.6 billion valuation as the company has raised $1.2 billion in total funding. 

Finally The History And Leadership

Based in Menlo Park, California, Robinhood was co-founded by Stanford University graduates Baiju Bhatt and Vlad Tenev in 2013 to democratize finance and make it more accessible to young and less affluent investors. Henceforth it accounted for about half of Robinhood customers are the first-time investors as well as their median age is 30. Later on, it was found that Robinhood cryptocurrency surpassed 10 million customer accounts that were up significantly from the two million accounts it had.