To invest or trade in cryptocurrencies, you would first need to open an account on any of the many online exchanges. Robinhood is just one of them, and a popular one. The US-based platform is best known as the stock trading app that started the concept of commission-free trading years before most others thought of it. Later, as the crypto boom hit the world, it also offered its services to those interested in the emerging industry. Robinhood is liked by beginners, because of its user-friendly interface.
What other factors determine Robinhood's worthiness? And what are its shortcomings, if any?
1. Unlike many other similar platforms, Robinhood offers commission-free trading, this basically means that the investor is not required to pay the platform any fee for making transactions. For instance, some top crypto trading apps charge up to 1.5 percent trading fee for most transactions. Say you want to buy Rs 1,000 worth of Bitcoin, then you will have to pay Rs 15 as commission. However, Robinhood charges a variable order flow fee.
2. In terms of security, it follows a 2-step verification process. Robinhood offers cold storage facility as well as insurance against crypto platform breaches.
3. Robinhood is an intuitive application. What it means is that the UI is not cumbersome to the user. The interface is friendly and shows the most common functions in one menu, rather than bury them in multiple menus with rigid hierarchies.
4. The app supports purchases of cryptocurrency, stocks, ETFs, and options. So it's one app, multiple benefits.
1. The biggest drawback of using Robinhood app for crypto trading is you can only buy, hold and sell cryptocurrencies. You cannot send your Bitcoin to another cryptocurrency wallet, or can't spend it on real-world purchases or receive it from other people.
2. Robinhood supports trading of a limited number of cryptocurrencies. At present, that number is seven, including chart toppers like Bitcoin, Ethereum and Dogecoin. If you decide to diversify your crypto portfolio, you have only seven options.
3.Also, the app is only available to US-based users.