Commission-free investing app Robinhood today announced the official launch of its much-anticipated cryptocurrency feature, allowing US customers to explore Bitcoin and Ethereum trading alongside traditional investment products.
The free stock-trading app joins a short list of US-based brokers that offer cryptocurrency trading products. There will be a waiting list, and Robinhood will onboard customers at a rate at which it can support them.
The company initially launched two crypto trading pairs for residents in five states – California, Massachusetts, Missouri, Montana and New Hampshire. By mid-2018, the trading app will make the new instruments available nationwide, with its newly created unit Robinhood Crypto planning to roll out the service gradually as other US states will be following in waves.
In a further move to enhance the offering, the company has launched Robinhood Feed, which allows all users to track market data, news, and create price alerts for 16 cryptocurrencies.
Robinhood seeks to carve out its niche by letting traders buy and sell cryptocurrency for $0 a trade. In doing so, the company plans to make money from order flows, a common tactic used by discount brokers to generate revenue by directing orders to certain trading venues. The company also receives interest on unused cash deposits from user accounts and offers a premium paid account for $10 per month, which gives users added features.
The six-year-old startup has been growing at an explosive rate. For now, Robinhood is able to float its free platform through compromises such as not having many physical locations, maintaining only a small staff for client service, and not spending on massive promotional campaigns.
Announcing the official launch, the company said in a statement: “Over the past few weeks, we’ve been overwhelmed by the enthusiasm towards Robinhood Crypto and are excited to contribute to the cryptocurrency community in a meaningful way. Together, we reached four million users and well over $100 billion in transaction volume on our brokerage platform, leading to over $1 billion in commissions saved in equity trades. With the release of Robinhood Crypto, we’re continuing our mission of making the financial system work for everyone, not just the wealthy.”
