Robin Hood Crypto Trading Platform Review

Cryptocurrency is a new age digital asset or a virtual currency secured by cryptography. It is based on a network distributed across many computers. Since the network decentralizes it, it allows them to remain outside the purview of the government authorities.

Robinhood ventured into the financial services in the year 2015, with a presence in Commission-free trading of stocks and exchange-traded funds. Robinhood became an easy favorite of experienced traders because it is easy to use the platform to make investments and be quite affordable in the fees it charged.

The platform allows the users to trade in stocks, exchange-traded funds, and options using any android platform at very affordable brokerage fees.

The platform started dealing and trading in cryptocurrencies in February 2018. Bitcoin and Ether were the first cryptocurrencies that began to be traded on this platform. But it has gradually increased the variety of coins that are being traded now on Robinhood.

In this review, we would, in particular, look at how well Robinhood handles cryptocurrency trading and how convenient it is for the new users. The essential criteria which have been considered for the review are the fees involved, ease of use, security features, and support at the back-end. We will also talk about a few alternatives available before giving a final verdict, so let’s start with our review-

  1. Fees

As a trading platform, Robinhood does not charge any fees for trading instruments like stocks or exchange-traded funds. They also state of not claiming any expenses for the trading of cryptocurrencies as well. But as per a few reviews and specific points mentioned in its user agreement, the price of the crypto displayed to the user includes particular fees.

If you wish to start trading the cryptocurrencies on this platform using a regular account, you get access maximum of $ 1000 after a deposit. Still, if you are dealing with an enormous amount, you need to wait for your settlement to be completed before you have access to use the money to trade in your currencies.

Then there is the Robinhood gold account that offers upgraded services like increased deposit limits. This account costs you $ 5 per month. Apart from the several advantages that it offers, if you use more than $ 1000 of margin, you tend to pay an interest of 2.5% yearly on the amount above the set limit.

  1. Ease of use of the interface it provides

Entering the platform is quite intuitive though you need to share your details like the address and contact number to verify your identity. The platform currently deals in seven cryptocurrencies: Bitcoin, Bitcoin Cash, Bitcoin SV, Dogecoin, Ethereum, Ethereum Classic, and Litecoin. Apart from this, the platform shows you real-time price movements of ten other cryptocurrencies, which includes Bitcoin gold, Monero, Dash, Ripple, Z-cash, to name a few.

Using this platform of Robinhood, you need to take care of the fact that you can trade only with the funds available or your account’s settled cash. The sale amount generated by transactions from the stocks and exchange-traded funds generally takes three business days to settle and come to your account. Robinhood is just a trading platform where the company holds any cryptocurrency that you buy; the money cannot be transferred to any external wallet or used to pay for any services.

  1. Safety features

Robinhood crypto, a subsidiary of Robinhood markets LLC offers you all the trading facilities in cryptocurrencies. Robinhood Crypto is not a member of FINRA (financial industry regulatory authority) or SIPC (securities investor protection Corporation). Still, it assures that the crypto you trade in is stored in a mixture of cold and hot wallets. Cold wallets that are not connected to the Internet are more secure for long term custody of your balances. The hot wallets are used for day to day transactions and are connected to the Internet. The majority of the holdings are in the cold wallet, which makes them safe from any fraud. Robinhood also provides crime insurance underwritten by Lloyds’ which protects your money from any cybersecurity breach.

  1. Support

Robinhood has gained immense popularity amongst first time and less-experienced traders. It provides support through the infrastructure that has many learning resources, which help the traders gain confidence and get to know the technicalities of the trade. The platform has considerable content that teaches all the basics of investment, and you can benefit through the variety of articles available for reading.

The information is categorized into sections like knowing about your account, taxation, bank transfers, etc.

If you enter your keywords in the search option, you get a wide range of articles covering almost all doubts about the topic. You may also contact that team through e-mail, but there is no option to speak to a representative over the phone.

Alternatives available

If we talk about trading in cryptocurrencies, Robinhood is quite similar to SoFi Invest.

Both of them operate in the US and deal with trading in cryptocurrencies and other products like stocks and exchange-traded funds. The trading in cryptocurrencies is based on crypto exchanges that carry the actual purchase and sale. Both the platforms are trading platforms, so the company holds any crypto bought by the investor, and the money cannot be sent to any external wallet or used to pay for any services.

The main difference is that SoFi invest offers a smaller gamut of cryptocurrencies to deal and trade with and is dependent on Coinbase for its transaction. On the other hand, Robinhood deals with various crypto exchanges to offer the best price to the customers. SoFi invest clearly states all the charges involved during the transactions, which is not the case with Robinhood. Robinhood has no mention of the maximum or minimum limit of cryptocurrencies that can be bought or sold.

Positives in a nutshell for Robinhood are that it is capable of being run on mobile phones, deals with multiple cryptocurrencies, and has a user-friendly interface. A few negatives being that it is only US based with certain hidden charges and can deal with crypto only as an investment source.

The Final Finding

With a few negatives, like the lack of transparency in the fee charged and other vital details, this interface’s use does not give a lot of confidence to the user. It is suited for existing clients who are already trading in stocks and exchange-traded funds through the interface and who can wait for three business days to settle the account to deal with crypto trading. For others, the platform does not offer much of an incentive to be used. Though it is cheaper than its competitors and a popular platform amongst the investors, we still suggest trading in crypto elsewhere if you are a new investor.