Traditional stock trading platform Robinhood, described as the "Coinbase Killer," enters the crypto exchange arena tomorrow February 1st in five U.S. states (California, Massachusetts, Missouri, Montana and New Hampshire), with plans to "add more states soon," according to their FAQ.
The crypto exchange platform opens modestly, trading just Bitcoin & Ethereum initially. However it does appear they're poised to add more tokens over time. They're also including real-time price tracking support for 14 more popular coins including LTC, XRP, DOGE, DASH, & BCH. Expect them to be early favorties to be added to the exchange.
Zero Fees & Commissions
Robinhood's primary selling point is in offering a "zero-fee" trading experience. That means no commission or fees related for standard buys, sells, and trades. See: Commissions & Fees
With no commissions, it begs the question: how does Robinhood make money? The answer is two-fold:
Early Registration Backlog
The app currently has over a million early registrants on their waitlist for the crypto trading platform, so I went ahead and signed up.
If you're also interested in registering, you can use this referral link and we'll both get a "free stock like Apple, Ford, or Sprint". The fine print:
Something tells me they won't be giving away many $200 shares, but who knows...
Answer Me This
Anyone have experience with traditional stock trading via the Robinhood app? If so, thoughts, praises or complaints?
Beyond taking market share from centralized exchanges like Coinbase/GDA, Bittrex, etc., do you think we'll see an impact on decentralized exchanges like Waves, EtherDelta, or Bitshares?
The addition of a big-time player to the crypto exchange market will aid in bringing some healthy competition to larger centralized operations like Coinbase/GDAX & Gemini. If they start carving out enough market share (which seems a given), Coinbase will be forced to respond with more competitive fee structures. This should certainly drive more casual and small-bankroll investors into the crypto market.
And while I do think Robinhood's zero-fee model might impact the volume on decentralized exchanges, I expect it will be modest. That's because Robinhood has a fatal flaw for many crypto investors: they're still centralized. Too many trade-offs on privacy, security, and susceptibility to influence from outside authorities.