The largely popular trading app Robinhood has recently announced the ability to trade cryptocurrencies.
The Robinhood app is known for having no trading fees. This is a huge game changer for the users of the Coinbase app, who can be hit with some significant fees while trading. Does Robinhood stand a chance against the current giant in the cryptospace?
Let’s jump right into the comparison between their platforms. Robinhood, currently with roughly 3 million users, will most likely see a huge user increase in the next few months. This number pales in comparison to the roughly 13 million users registered with Coinbase. If Robinhood has the potential to steal some of those current Coinbase users, it could spell trouble for the giant. However, the Robinhood crypto trading is only available in California, Massachusetts, Missouri, Montana, and New Hampshire, while Coinbase is open for all U.S. citizens.
Robinhood’s claim to fame is fee-free trading, which is coupled with their gold-membership for roughly $6 a month. Additionally, Robinhood offers up to $1000 instantly from money transfer into your account. For anything above that, there is a fee and takes a few days to verify. Coinbase has a by-account money transfer limit program, which applies to both Credit/Debit card purchases (instant but with a fee) and bank account connection, (with a smaller fee) and takes a few days to verify. Coinbase also allows you to connect to its trading platform, GDAX.com, to limit trade and remove the fees from trading between USD and cryptos.
A large difference between Robinhood and Coinbase is that Coinbase gives you the ability to export your tokens from their site. This allows you the ability to store it in a hardware wallet for security or move it to another exchange to purchase altcoins. With Robinhood, you do not own the coins you trade.
Much like with their stock trading, you don’t hold the stocks; rather Robinhood does on your behalf. Currently Robinhood is planned to support Ethereum, Litecoin, and Bitcoin at least, with more coins on the way like Dash and Monero. Coinbase is limited to Bitcoin, BitcoinCash, Ethereum, and Litecoin. Robinhood does, however, allow you to purchase ETF’s on cryptos. An ETF is an exchange-traded fund, which is much like a common stock but provides more functionality and security than trading crypto for the average Joe. Coinbase currently has no plan to allow ETF trading on their platform.
Both platforms have things in common as well as things that are more favorable. Time will tell which the average crypto trader will choose. Make sure to do your research before investing in either site and be aware of the financial implications of doing so. Both sites are a great way for college students to invest and trade, even in a bear market if one knows what he or she is doing.