Bitcoin has been on a hot streak since starting out with a ratio of 1 coin to $0.0008. Now in January 2021, coming in at $34,664 per Bitcoin makes this one of the most impressive growth assets in the world. It’s no wonder that everyone who can stomach the risk wants a piece of this pie!
In this article, we are going to marry two of the most popular topics in modern-day personal finance: Bitcoin and Robinhood.
Robinhood is a commission-free stock and crypto trading mobile app that is hugely popular among millennials and Gen Zers. Known for its sleek user interface and completely free trading, Robinhood has amassed over 13 million users who are passionate about investing.
Though popular among many for its free stock trades, Robinhood also allows its members to transact in cryptocurrencies. There are currently 7 tradeable cryptocurrencies on the app and an additional 10 that are available for tracking.
This wide range of availability is great for investors who want access to the most popular coins but leaves something to be desired for those who want the less well-known options.
Cypto is used interchangeably with cryptocurrency which is a virtual form of money that is not issued by a central authority like a government.
While they are not issued by a central government, cryptocurrencies are secured by cryptography and are managed on decentralized networks utilizing blockchain technologies. Cryptocurrencies are unique because they are almost impossible to counterfeit.
These coins, like your account balance on Venmo, can be sent directly to another individual or business and used as payment for goods or services. These transfers are also completed without processing fees that often disgruntle retailers.
In February of 2018, Robinhood began allowing its users to trade two of the most popular cryptocurrencies Bitcoin and Ethereum.
Since then, the company has added an additional 5 cryptocurrencies. Currently users can trade Bitcoin, Bitcoin Cash, Bitcoin SV, Ethereum, Ethereum Classic, Litecoin, and Dogecoin.
Users can also track price movements and news for the above and 10 additional cryptocurrencies. This is a greater selection than many of the other investing apps that have decided to roll out crypto including Webull Crypto which currently only offers 4 cryptos to investors.
The actual steps required to purchase Bitcoin on Robinhood is fairly straightforward.
First, you’ll need to make sure that you have a Robinhood account. This should take less than a couple of minutes and can be done by downloading the Robinhood app and creating an account.
Second, in order to trade (i.e. purchase Bitcoin or other assets) you will need money in your account.
Robinhood currently supports immediate access to $1,000 in funds while your bank deposit is processing. With Robinhood Gold, a premium plan which costs $5 per month, $5,000 is instantly available. This instant deposit amounts grow as your account grows.
Third, purchasing Bitcoin is as simple as can be with Robinhood’s user interface. To do this, click the magnifying glass at the bottom of your screen and then enter the cryptocurrency you are interested in purchasing (Bitcoin in this case) into the search bar at the top.
Upon entering the name of the cryptocurrency, you’ll notice the interface changes from a rather simple and standard design to an edgy look to showcase its crypto platform. At this point you can very simply click ‘Buy’ and enter the dollar amount you are interested in buying.
Because you enter a dollar amount and not a fixed number of shares, you are utilizing Robinhood’s feature of fractional coins. Without it, you would need to save up for the full price of one coin.
These transactions can happen at any time of day as Robinhood allows commission-free trading 24/7. This differs from stocks in that there is no standard trading window for transactions.
However, due to the speculative nature of crypto (it is not regulated by a central body like the government) it is not currently available in all states.
It is currently unavailable in Hawaii, Nevada, New Hampshire, and West Virginia.
Before using Robinhood Crypto, it is important to understand the following:
When you would like to sell your shares of Bitcoin, the process is very similar to buying. Simply locate your position within the app and select ‘Sell’. Similar to stock investing, you will have to wait 5 business days after selling to withdraw your funds to an external account.
Robinhood currently does not allow users to transfer coins into or out of the app. This is done out of an abundance of caution to prevent fraud and other illegal activities.
You likewise cannot transfer your Robinhood Crypto to your own offline wallet.
Given that this is not an option on Robinhood Crypto, if you are serious about protecting your crypto, you may want to consider a platform like Coinbase that specializes in cryptocurrency. When you use one of these platforms, you'll be able to move your crypto to an external wallet and take control of keeping it safe.
In summary, Robinhood offers a sleek and simple user experience for those wanting to take their first position in cryptocurrency. Robinhood makes the purchase and sale of crypto relatively painless although transferring is more difficult.
However, these inconveniences might be acceptable if you appreciate the commission-free trades and having your stocks and coins all located within the same app.
Robinhood also falls short in its lack of nationwide availability and the number of cryptocurrencies. While you can feel confident that you have access to the most popular coins, experimentation is limited on Robinhood.