The Robinhood mobile trading app has announced the launch of a commission-free cryptocurrency trading service. And it’s a serious matter of concern for Coinbase that takes 1.5–4% commissions in the U.S., as now their potential customers from California, Massachusetts, Missouri, Montana and New Hampshire can buy and sell Bitcoin and Ethereum without any extra fees on the Robinhood platform.
Robinhood team believes that their free service is a strong tool to attract people to their platform that enables users to trade stocks, ETFs and options without any additional charges. Moreover, its retro-future interface offers users an easily understandable way to stay tuned with pricing and news about 16 currencies: Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ripple, Ethereum Classic, Zcash, Monero, Dash, Stellar, Qtum, Bitcoin Gold, OmiseGo, NEO, Lisk and Dogecoin. Currently, everyone can already enjoy the benefits of tracking service but an opportunity to get the advantages of free trading will come soon to the waitlisted users and other states.
The main idea of this commission-free trading is to bring cryptocurrencies to a wider audience of investors providing them with a platform that “democratizes” trading through expanding the group of potential investors using mobile and web-based apps. The company strives to make traditional and cryptocurrency trading more accessible for its customers excluding their additional expenses for paying the commission.
The first announcement of the Robinhood’s plans to start zero-fee crypto trading attracted one million users in just the first four days. So, the current number of Robinhood users is nearly four million who have transacted more than $100 billion on its brokerage platform saving $1 billion in commission fees.
On the majority of stock trading services customers should pay around $7 per transaction to cover these companies’ operational expenses, including awards for marketing and sales teams. Established in 2013, Robinhood eliminates extra fees encharging these functions to its engineers. The company makes money on the interest of cash that its customers keep with it and by offering chargeable monthly Robinhood Gold subscriptions that allow users to borrow money to trade with.
In addition to the launch of cryptocurrency trading Robinhood Crypto, the company has also released the launch of a social media-type platform named Robinhood Feed which will give investors a possibility to discuss different cryptocurrencies, market trends and new online. Nevertheless, at the moment the Feed platform is available to a limited number of users only.