Robinhood is currently providing one of the easiest ways to get started with cryptocurrencies. You can download the app, upload some money and buy tokens in just a few minutes.
But there are a few caveats. First, Robinhood is only available in the U.S. if you want to trade stocks, ETFs and options. And if you’re interesting Robinhood Crypto more specifically, it is only available in 17 states.
Robinhood also claims that there’s no fee on cryptocurrency trading. Given the liquidity of cryptocurrency exchanges, there’s always some spread. It means that if you buy one bitcoin and if you sell one bitcoin, there will be a tiny gap between those two prices because of the tiny order book. Saying that there’s no fee is misleading.
The startup doesn’t operate an exchange itself. It acts as a broker with other exchanges. That’s why it doesn’t make sense to say that Robinhood is going to kill Coinbase. Robinhood is most likely partnering with Coinbase behind the scene as one of its exchanges for instance. On a user experience level, Robinhood Crypto competes with Coinbase’s main product and Circle Invest.
The company has created a second company that doesn’t comply with the same regulatory framework because it’s not a broker dealer. You can currently trade Bitcoin, Ethereum, Litecoin, and Bitcoin Cash.
Unfortunately, Robinhood doesn’t let you manage your wallet addresses. It means that you can’t send or receive tokens from another wallet. You have to convert to fiat currency first. But it’s still a dead simple way to get started on this market.