Robinhood Financial LLC, well-known among Millennials for its zero-commission stock trading app, announced last week plans to let its users buy and sell digital coins without fees starting this February. With the option slated to become available to customers in most states by mid-2018, over 1 million people joined the sign-up list in the five days after it opened.
Robinhood Crypto will offer trading of bitcoin, the world's largest cryptocurrency by market capitalization, alongside the digital currency ethereum. The new feature will come in waves, first launching California, Massachusetts, Missouri, New Hampshire and Montana. (See also: Bitcoin Could Lose 90% of Its Value: Street Vet.)
"Crypto is going to change the world and we want to help drive that," said the fintech company's co-founder, Baiju Bhatt, in an interview with Business Insider.
Fintech App Says It Will Break Even on Decision
While bulls cheer on the continued breakthrough of digital currency trading into the mainstream financial space, skeptics continue to point to recent milestones as indications of a bubble ready to burst. Due to the sticky supply of coins, even the mildest fluctuation in demand for digital currencies has resulted in major price swings. Bears point to the growing waitlist as another sign of people's unfounded willingness to get in on the action. Bitcoin, trading just above $10,000 per coin on Tuesday afternoon, has gained 10-fold since this time last year, yet has lost nearly 50% of its value since highs reached in mid-December.
Robinhood's co-founder says the decision to bring on crypto trading will help the platform with customer acquisition. The firm, which already lists more than 3 million users, is confident it will "break-even on this" play, which "could dramatically increase user growth."
The Palo Alto, Calif.-based stock brokerage was founded in 2013 and has raised a total of $176 million from backers including Index Ventures, New Enterprise Associates and DST Global. According to Robinhood, the unicorn startup is valued at $1.3 billion. (See also: UBS Chair Warns of ‘Massive’ Bitcoin Downfall.)
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns cryptocurrency.