{"id":22274,"date":"2018-04-13T16:10:29","date_gmt":"2018-04-13T16:10:29","guid":{"rendered":"http:\/\/ci027cfe63a0092697"},"modified":"2018-04-13T16:10:29","modified_gmt":"2018-04-13T16:10:29","slug":"robinhoods-first-tentative-steps-cryptocurrencies-appeal-traders","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/markets\/robinhoods-first-tentative-steps-cryptocurrencies-appeal-traders","title":{"rendered":"Robinhood\u2019s First Tentative Steps Into Cryptocurrencies Appeal to Traders"},"content":{"rendered":"
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The Robinhood<\/a> mobile app for smartphones, operated by a financial services firm headquartered in Palo Alto, allows individuals to invest in publicly traded companies and exchange-traded funds listed on U.S. stock exchanges without paying a commission. Earlier this year, the company announced that it was branching into cryptocurrency trading with Robinhood Crypto<\/a>.<\/p>\n

The Robinhood business model<\/a> is based on collecting interest on the cash and securities in Robinhood accounts, much like a bank collects interest on cash deposits, rather than charging traders with commissions. Besides that, Robinhood sells premium \u201cRobinhood Gold\u201d accounts priced at $6 per month, with extra features such as the possibility to trade after hours and borrow capital.<\/p>\n

In March 2018, The Wall Street Journal<\/em>reported<\/a> that, according to unnamed sources familiar with the matter, Robinhood is about to close a $350 million funding round from a group of investors led by Russian firm DST Global. The new funding would boost the company\u2019s valuation to $5.6 billion, \u201ca fourfold increase in just one year that reflects the stock-trading app\u2019s soaring popularity among millennials.\u201d<\/p>\n

This would place Robinhood among the top 15 highest-valued private technology companies in the U.S., \u201crepresenting an ambitious bet by investors that the firm can capture a sizable piece of the financial-trading market,\u201d according to the WSJ<\/em>.<\/p>\n

Trading via Robinhood is especially popular among millennials. \u201cBy divorcing the idea of investing from the aging financial institutions that some millennials have come to distrust, Robinhood is ushering a new generation into the stock market,\u201d noted<\/a>Fast Company<\/em>. According to an early investor in the company, Robinhood \u201cdid a great job building a trusted relationship with the millennial demographic.\u201d<\/p>\n

Robinhood founders Vladimir Tenev and Baiju Bhatt created the company in 2012 to make financial services accessible to everyone regardless of income. \u201cRobinhood started with the idea that a technology-driven brokerage could operate with significantly less overhead,\u201d states the company\u2019s website. \u201cWe cut out the fat that makes other brokerages costly \u2014 hundreds of storefront locations and manual account management.\u201d<\/p>\n

In a 2015 WSJ<\/em> interview<\/a>, Tenev said that, before Robinhood, many of the 90 million \u201cmobile-first, share-everything\u201d millennials in the U.S. felt investing was inaccessible due to fees and minimum account balances.<\/p>\n

Besides low costs and streamlined paperwork, the sleek interface and powerful back-end features of the Robinhood app are also designed to be appealing to tech-savvy, demanding digital natives. The app features state-of-the-art security measures, real-time market data, timely notification of earnings, dividends, or splits, and a custom low-latency trading system.<\/p>\n

Though the company plans to expand globally<\/a>, Robinhood is still very much focused on the U.S., with Australia<\/a> being the only foreign country where specific expansion plans have been announced.<\/p>\n

Robinhood Crypto<\/h3>\n

In February, Robinhood started<\/a> rolling out Robinhood Crypto, a new option to trade cryptocurrencies within the app. Currently, 16 cryptocurrencies<\/a> including BTC, ETH, NEO, QTUM and ZEC are supported.<\/p>\n

\u201cOver the past few weeks, we\u2019ve been overwhelmed by the enthusiasm toward Robinhood Crypto and are excited to contribute to the cryptocurrency community in a meaningful way,\u201d reads the launch announcement<\/a>. \u201cWith the release of Robinhood Crypto, we\u2019re continuing our mission of making the financial system work for everyone, not just the wealthy.<\/p>\n

Robinhood Crypto<\/a> trading is only available, at this moment, to users in California, Massachusetts, Missouri and Montana. The company is rolling out crypto trading gradually and claims that over one million people are in line to get access. In the meantime, all investors on Robinhood can monitor and track cryptocurrency market data. A social platform to discuss cryptocurrencies, dubbed Robinhood Feed, is also being rolled out gradually.<\/p>\n

\u201cInvestors also see opportunity in Robinhood\u2019s recent introduction of trading in cryptocurrencies like bitcoin, according to a person familiar with the investment,\u201d notes the WSJ<\/em>.<\/p>\n

For now, Robinhood doesn\u2019t support<\/a> withdrawing cryptocurrencies to external wallets or depositing cryptocurrencies from external wallets to Robinhood Crypto accounts. The company plans to allow cryptocurrency withdrawals soon. Concerning cryptocurrency deposits, the only statement is, \u201cWe\u2019ll be sure to update you if and when this type of transfer becomes available.\u201d<\/p>\n

Not surprisingly, the reluctance to allow cryptocurrency deposits is motivated by regulatory requirements \u201cto prevent money from illegal activity being used for transactions on Robinhood Crypto.\u201d<\/p>\n

However, it can be argued that, to democratize investing and put \u201cpower previously held by financial institutions directly in the hands of the people,\u201d as they state on their company blog<\/a>, Robinhood should consider allowing cryptocurrency deposits, especially in view of an international expansions. <\/p>\n

If the Robinhood team really wants to go global, they should bear in mind that billions of people in the developing world don\u2019t have access to credit cards and bank accounts, and cryptocurrencies are rapidly emerging as an alternative financial empowerment means for the unbanked.<\/p>\n

Bitcoin Magazine reached out to Robinhood for comments and questions but was told that there were no representatives available.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

The mobile trading app is rolling out cryptocurrency trading gradually and claims that over one million people are in line to get access.<\/p>\n","protected":false},"author":3509,"featured_media":22275,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[1747,430,571,468],"class_list":["post-22274","post","type-post","status-publish","format-standard","has-post-thumbnail","category-markets","tag-cryptocurrencies","tag-investing","tag-robinhood","tag-trading"],"author_data":{"id":3509,"name":"Giulio Prisco","nicename":"giulio-prisco","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/2d091b908741b627d89036dd43748bb5c5edcfe9f805501703e2c3af34dadfca?s=96&d=robohash&r=g"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/robinhoods-first-tentative-steps-into-cryptocurrencies-appeal-to-traders.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/22274","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/3509"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=22274"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/22274\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/22275"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=22274"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=22274"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=22274"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}