Robinhood Financial LLC, well-known among Millennials for its zero-commission stock trading app, revealed last week that it would begin allowing its customers to purchase and sell digital currencies without fees in February. With the option set to be offered to consumers in most states by mid-2018, over 1 million individuals signed up in the first five days.
Robinhood Crypto will allow users to trade bitcoin, the world’s most valuable cryptocurrency by market capitalization, as well as the digital currency ethereum. The new function will be introduced in stages, beginning with California, Massachusetts, Missouri, New Hampshire, and Montana. (See also: Street Vet: Bitcoin Could Lose 90% of Its Value.)
“Crypto is going to transform the world, and we want to help drive that,” said BaijuBhatt, co-founder of the fintech business, in an interview with Business Insider.
Fintech App Says It Will Break Even on Decision
While bulls applaud the growing penetration of digital currency trading into the mainstream financial sphere, critics point to recent milestones as signs of a bubble about to burst. Due to the limited quantity of coins, even minor fluctuations in demand for digital currencies have resulted in significant price changes. The rising backlog, according to bears, is another symptom of people’s irrational desire to join in on the activity. Bitcoin, which was trading just around $10,000 per coin on Tuesday afternoon, has increased tenfold since this time last year, but has lost about half of its value since the mid-December highs.
According to Robinhood’s co-founder, the move to include crypto trading would benefit the platform with client acquisition. The company, which currently has over 3 million members, believes it will “break even” on this move, which “may drastically enhance user growth.”
The Palo Alto, California-based stock brokerage was formed in 2013 and has garnered $176 million in funding from investors such as Index Ventures, New Enterprise Associates, and DST Global. The unicorn firm is valued at $1.3 billion, according to Robinhood. (Also see: UBS Chair Warns of ‘Massive’ Bitcoin Fall.)
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is very dangerous and speculative, and this article is not a suggestion by Investopedia or the author to do so. Because every person’s circumstance is different, a knowledgeable specialist should always be contacted before making any financial choices. Investopedia makes no guarantees or warranties about the accuracy or timeliness of the information provided on this site. The author owns cryptocurrencies as of the day this post was published.
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