Robinhood has announced that they will allow zero fee Bitcoin and Ethereum (more coins to be added later) trading with the Robinhood app. Robinhood is a very popular stock trading app that allows zero fee stock trading and instant funding of your Robinhood account for up to $1,000.
While it is always nice to see a company like Robinhood offer easy access to Cryptocurrencies, this move comes with some red flags.
Red Flags & Concerns
Some of the concerns and red flags about trading Cryptocurrency on Robinhood are as follows:
- Trading to only be allowed in California, Massachusetts, Missouri, Montana, and New Hampshire initially. This means that State laws more than likely play heavily into what Robinhood will be allowed to offer for trade on their platform. Privacy focused coins like Monero will likely face large obstacles to making it on a platform such as this.
- You can not deposit existing Bitcoin or Ethereum into your Robinhood account.
- You don’t own your coins. This is the biggest issue with Robinhood. Not only do you not control your private keys but you are unable to transfer your coins outside of Robinhood without further verification.
Yes. To get started with this process, you’ll need to send additional verification to customer support for security purposes. We’ll need a copy of:
- Your bank statements
- Two government issued IDs (front and back)
- A selfie with your ID
Keep in mind, transfers and withdrawals can take up to one week. Any fees incurred in this process, such as network and mining fees, will be passed along to you.
If you simply want to trade fiat to crypto back and forth then Robinhood isn’t a terrible option for you.