Robinhood: How the Fast-Growing Stock Trading App Got Into Crypto

As been reported by TechCrunch Sept. 6, stock and cryptocurrency trading platform Robinhood is planning to launch an initial public offering.

After raising $363 million in a series D funding round and $110 million in a series C round, Robinhood was valued at $5.6 billion, making it the second most valuable fintech startup in the U.S. Currently, there are reportedly five million users conducting trades with cryptocurrencies on the Robinhood platform.

What Robinhood is and how it worksDubbed by the press as a "Trading app for millennials," before its involvement in crypto, Robinhood existed as a solely mobile application for stock trade.

The main source of income for Robinhood is margin trading - i.e., lending a money with an interest rate to the owners of Robinhood Gold accounts.

The company quest into cryptoIn February 2018, Robinhood launched its no-commission cryptocurrency trading division with a signature, Tron-themed design.

Robinhood Crypto is currently available in 19 states of the U.S.In the first four days of the Robinhood Crypto announcement, it had one million users signed-up.

While Robinhood allows traders to buy and sell crypto on the platform, users cannot transfer assets purchased on the platform to a third-party wallet.

"What has been created so far only scratches the surface of how Robinhood envisions cryptocurrencies to play a role in our users' lives."

"At some point, those venture capitalists are going to want some return on their investment, and zero commission trading removes a major source of revenue. But free trades are the key feature Robinhood offers. They will have to generate revenue somehow."

As for the digital currencies, the Robinhood Crypto app didn't spark any substantial controversy, is still enjoying a good reputation and produces optimism in small investors who are tired of the transaction fees imposed by the established players.