The cheapest stocks on robinhood, a commission-free investment application, will soon be able to invest in cryptocurrency in addition to other traditional investment offerings, the company announced on Thursday.
Crypto trading will initially include only bitcoin and ethereum, with more coins offered later. Starting in February, residents in five states will be the first to be able to buy and sell, namely California, Massachusetts, Missouri, Montana and New Hampshire and with other countries following the tide until trade is available throughout the country.
Starting last Thursday, all users can track market data for 16 coins (including litecoin and ripple), read crypto news, and make price alerts on Robinhood.
“It’s pretty clear that people care about Cryptocurrency,” said Baiju Bhatt, co-founder and co-CEO of Robinhood. “We want to be there and help shape the way the industry works with better platforms at better prices.”
Crypto can be more risky than other investments because of the extreme volatility and security risks associated with assets in relative childhood. But that hasn’t stopped the wave of investors who want to jump in.
Bitcoin has been the word on everyone’s lips for the past few months, because cryptocurrency has reached record highs. This has more than doubled since October and now trades around 11,000 dollars, although it dropped from a high level of only 20,000 dollars in December.
Bitcoin is not new to founder and co-CEO of Bhatt and Robinhood Vlad Tenev. They have seen bitcoin and crypto for a long time, even as far back as 2010 when they were mining their own crypto on personal computers.
“The thing we see now, over the past year is that crypto and bitcoin show resilience,” Bhatt said. “Many times people have quickly counted it, it has gone up and down, now its endurance is something that has true endurance”. There is an increasing demand, especially among young people to get into action quickly.
A recent study showed that if given 5,000 dollars, 12 percent of the millennial generation would put the money into crypto over other types of investment, according to Swell Investing. That compared with only 3 percent of those aged 45-54 and 55-64 years. Men are more interested than women who put their money into crypto, with 14 percent of Millennials saying that they would choose other investments, compared to 9 percent of women.
For companies that have established themselves as democratizing capitalism and making high-end financial products available to everyone, offering crypto is very much in line with Robinhood’s mission, Bhatt said.
“Crypto currency has the potential to change how money around the world works from the bottom up,” he said. “This is a shift from institutions back to society and we want to be central in creating that change.” And Robinhood who bet into the space will make investors more comfortable at the table. Today, most people buy cryptocurrencies like bitcoin and ethereum on digital exchanges such as Coinbase, Blockchain and others.
Robinhood will offer easy access to funds, Bhatt said. This will make bank transfers of up to 1,000 dollars immediately available for trading this crypto currency. Any additional funds transferred will be placed in your account through the normal ACH transfer system.
“Products are out there now because crypto trading feels more like Friendster,” Bhatt said, referring to the initial social network before Facebook. “It is not clear which will emerge as the best and the way people invest in crypto today will not be like they do in the future, but we aim to be part of the future”.