How to Buy Crypto on an Investment Platform
Nine years ago, getting your hands on digital currency was a bit harder than it is today.
If you were techy, you could start mining the cryptocurrency in your home.
It wasn’t hard back then. In fact, you could have used your personal computer.
But if you didn't want to mine, your options were a bit more limited.
You could have found a friend who was mining Bitcoin and convinced them to do a peer-to-peer trade.
Or you could have been more daring and trusted some of the earlier exchanges on the market like Mt. Gox.
But we’ve come a long way from all that.
Today there are so many ways to get your hands on cryptocurrencies that some investors feel overwhelmed.
You can buy cryptocurrency with your bank account on a wide range of exchanges, including Gemini, Coinbase, and Bitstamp. For those who are bolder, you can buy cryptos with other cryptos on exchanged like Bitfinex and Binance.
And you don’t even need to touch an exchange.
You can buy cryptocurrencies through a digital currency IRA like BitcoinIRA. Or you can participate in the digital currency market through a public company that handles blockchain investments like Global Blockchain Technologies.
In short, you have so many options you may feel overwhelmed.
But brace for one more.
Today, you can get digital currency on traditional investment platforms. And which exchange is leading the charge?
Well, it's none other than Robinhood, the young, cutting-edge stock brokerage that has enchanted millennials around the globe.
Robinhood: The Platform That Bats for the Underdog
Robinhood is one of the first traditional investment platforms that has granted its users the ability to both buy and sell digital currencies.
Founded in 2013, Robinhood was one of the first stock brokerages to target millennials. The exchange allows its users to sell U.S.-listed stocks and ETFs with zero commission, making it a true unicorn in its space.
The zero-fee policy quickly attracted young investors unwilling to shell out extra money for each trade.
In its most recent statement, Robinhood says it now caters to over 5 million users. That is dramatic growth considering the company closed 2017 with 2 billion users.
In 2017, Robinhood also raised $110 million through a Series C offering, achieving a valuation of $1.3 billion. In total, Robinhood has been able to pull in $175 million in funding.
Why has the exchange been so popular?
It would seem Robinhood's popularity stems from its ability to both emulate and challenge older stock brokerage models. Like many of today's brokerages, Robinhood provides its users with a cutting-edge user interface. That said, its actual zero-commission practice flies in the face of other brokerages.
And then there is the cryptocurrency.
Robinhood kicked off its cryptocurrency offerings with just Bitcoin and Ethereum, demonstrating to its young user base that it was willing to keep up with the times.
Then on July 12th, Robinhood announced that it would be expanding its offerings to include both Litecoin and Bitcoin Cash.
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But Is Robinhood All That Different From Coinbase?
At this point, you may be wondering how Robinhood is different from Coinbase.
After all, Coinbase is the world's leading software wallet. It is respected and beloved by a massive portion of the digital currency community, and that makes it hard for the competition.
Beyond that, Robinhood only allows traders to trade Bitcoin Cash, Bitcoin, Litecoin and Ethereum, the same as Coinbase.
That said, Robinhood offers one thing that Coinbase does not: a zero-fee policy.
This one policy makes Robinhood different from every exchange on the market.
Robinhood's CEO stated that the company's goal is to prevent its customers from getting "ripped off with 4 to 5 percent transaction fees" or by "sketchy foreign exchanges."
And this is all good news for digital currency investors who may not be ready to take the plunge into a digital currency exchange and want to avoid high-cost fees.
It's also good news for the digital currency sector.
Stock brokerages offering digital currency trading is the first step toward digital assets being accepted by mainstream investors. It opens the door for new opportunities in the future. Even if Coinbase manages to hold onto its crypto crown, more avenues to invest should be seen as a positive.
But are there any drawbacks to Robinhood?
Does Robinhood Have Any Drawbacks?
While Robinhood allows investors to trade the same digital currencies as Coinbase, there are a few differences.
For starters, Robinhood does not allow investors to withdraw their coins. To many investors who want instant access, this is a massive shortcoming. That said, the exchange does plan on supporting withdrawals in the near future.
Robinhood also does not allow investors to transfer their existing digital currency into their Robinhood crypto account. The company's main goal with this policy is to prevent money from illegal activities from being used for Robinhood transactions.
Beyond that, Robinhood does not allow digital currency trading in all the same states as Coinbase.
Currently, Robinhood allows Bitcoin and Ethereum trading in Arizona, California, Colorado, Florida, Indiana, Massachusetts, Michigan, Mississippi, Missouri, Montana, New Jersey, New Mexico, Pennsylvania, Texas, Utah, Virginia, and Wisconsin.
Coinbase operates in every state in the United States except for Wyoming and Hawaii.
So even though Robinhood has an edge when it comes to the zero transaction fees, it still has room to grow when it comes to its reach.
If you're interested in learning more about Robinhood, you can download the application on either the Google or Apple app store.
The company also has a web-based platform, which you can access here.
You can also learn more about Robinhood's crypto policies here.
That's all we have for this week's educational feature. Keep an eye on your inbox for this week's digital currency update.
There are a lot of big events happening in the digital currency market right now, including Coinbase's announcement that it is considering new tokens. In our update, we're going to take a deeper look into that story.
@AlexandraPerryC on Twitter
Alexandra Perry is the managing editor of Token Authority and the associate editor of Technology and Opportunity. She also contributes weekly content to Wealth Daily, a free investment research newsletter that addresses a range of market topics. She has multiple years of experience working with startup companies, primarily focusing on artificial intelligence, cybersecurity, alternative energy, and biotech. Her take on investing is simple: a new age of investor can make monumental returns by investing in emerging industries and foundational startup ventures.
P.S. If you're interested in learning more about public blockchain companies and the future of the blockchain market, make sure to check out our latest Investing After Hours podcast, featuring Shidan Gouran, the CEO of Global Blockchain Technologies. Just click here.