Robinhood Crypto Review


Are you a fan of the stock market? How
about the crypto market? Or are you a fan of just getting things for free? If you
answered, yes, to any of those than this episodes for you. Hello and welcome
everyone you’re watching Go 4 Broke Media’s inaugural episode of G4B TV.
Bringing clarity to cryptocurrency. I’m your host Ken and today we’re
covering everything Robinhood Crypto. For those unfamiliar with Robinhood,
it is a revolutionary free mobile stock trading app where millennial traders
speculating over shares of snap, get “Rekt” by a single tweet from Kylie Jenner. Clip Plays: Snap
the ticker sinking 8% today. Thank You Kylie Jenner now on pace for one of its
worst days in a long time. Let’s welcome in your trading nation team today. Any
support here in the charts for Snap? Well, you know, I guess Kylie Jenner is the new
E.F. Hutton when she talks people listen, right?
Snap stock lost it reported 1.3 billion in market value after that tweet
was released. That’s a lot of millennial “moolah” guys. So not only is she the cutest
Kardashian, but she’s the richest one, too. Recently, January 25th, Robinhood
announced that they will allow free trading of cryptocurrencies, Bitcoin and
Ethereum on their app and have since just a month later allowed the first
users to trade who are at the top of the waiting list. Robinhood Crypto is unique
in that unlike investing in the traditional stock market which has
regular trading hours, investing in the crypto market as those in the sphere
know, like money, “Never Sleeps” and so according to the marketing team from
Robinhood, you shouldn’t either. So far, wait listed
trading access is limited to only five states and within those five states
access will be rolled out in phases. Now the first five states that are going
to spearhead trading of cryptocurrency, are Missouri, Massachusetts,
Montana, New Hampshire, and my home state sunny California, which is also
where Robinhood is headquartered out of. Sorry, New York. Now if you don’t live in
any of these five states, no worries. Robin Hood has promised that they’re going to
expand training access to many more states soon. In terms of when to expect
this expansion, according to the company website, “there are no exact dates planned
for roll-out of additional states yet.” The site has only provided guidance that
quote, “we plan to add support for more states soon.” However according to an
article from Investopedia from January 30th, they say that the option is slated
to become available to customers in most states by mid 2018. It’s not clear
whether Investopedia is blowing smoke, but I have seen this from other news
sources as well. However, with mid 2018 only a couple months away, I find the
statement highly unlikely, and what I would deem “fake news.” News clip plays. You are fake news. Mr. President elect, that’s not appropriate. Now if you are a New Yorker, Robinhood has said it hopes to
offer cryptocurrency trading to New York residents in the future. But noted that
the state and others may require specific licensing and approvals. Which
reading deeper into, I mainly assume they’re talking about pending approval
of state money transmitter licenses. And it’s this state specific regulatory
story that helps explain the reasoning behind the selection of states. At which
when you first hear them seems like the executive simply threw darts at a map of
the U.S. For instance, if you check out this info-graphic released by Robinhood,
it’s safe to assume that just California’s Bay Area likely has a
higher trading volume and therefore customer demand,
than the entire state of Montana. Yes, the state where taking a Lyft, means a pickup
ride down an old dusty road, to meet that girl you met on FarmersOnly. And this
graphic only displays stock market investors, the number of crypto investors
remains much smaller. But as a consolation prize, if you’re one of the
million plus users stuck on the waiting list, instead of being obsessively stuck
refreshing the page of CoinMarketCap, instead you can enter the apps Tron
inspired cryptocurrency portion. Anyone with the most upgraded version of Robinhood can track and add to their watchlist,
the prices of 16 cryptocurrencies. In addition, to the tradable cryptos of
Bitcoin and Ethereum the other 14 include large cap heavyweights such as
Litecoin and Ripple. And even goes as far as to include
everyone’s favorite shit coin Doge. [Comical Woof sound plays.] Now as of right now Bitcoin and
Ethereum are only available for trading between USD. Therefore, you can’t trade
your Bitcoin for some Ethereum or vice-versa.
But the company is clearly planning to add support for more cryptocurrencies
in the future. Especially given public statements from the founders. With the
added caveat that just because they provide market data for 14 other crypto
currencies, this doesn’t predispose them to have to add them all as tradable
assets to their platform. Included in the release of Robinhood Crypto is Robin
Hood Feed. Robinhood Feed, as the company describes it, is a social platform that
lets you engage with the Robinhood community and stay on top of what’s
happening with cryptocurrencies at any given moment. Just the name, Robinhood
Feed is vague and seemingly applicable to the app’s stock and options traders as well,
despite being exclusively marketed as a chatroom for cryptocurrencies. Robin
Hood Feed despite its appearance to novice investors as a novel idea, isn’t a
new concept. It’s actually already been implemented by competing online
brokerage firms in both the crypto and traditional investment space. The most
notorious example being Poloniex’s infamous “troll box.” Known by OG crypto
traders as being a hotbed for nefarious pump-and-dumpers, as a road to quick
riches or gut-wrenching losses. Before being disabled for obvious reasons, it
was a source ripe for market manipulation. Another example of this, are
TD Ameritrade’s Think or Swim chat rooms which are promoted and used by equity
and derivative traders to share insights and strategies for stocks options and
futures trading. Leaving the shameless “shilling” to less patrolled sites such as
Reddit, and yes, even YouTube. Now in this discussion I should note that Robinhood
will not support ICO’s. In the U.S. ICO’s are the most highly scrutinized by the
media, and are heavily regulated by the big SEC. This is due to the
overabundance of fraud cases in this space. Therefore unless you’re an
accredited investor, you are legally forbidden from participation. However, it
is interesting to note their language, “Robinhood Crypto doesn’t support ICO’s
at this time.” Which opens the opportunity, for future speculation. But
unless regulations are rolled back, in which the opposite is true,
I would speculate that if ICO capabilities are added to the platform,
they would only be made available to Gold members. Robinhood Gold is Robin
Hood’s paid service for more sophisticated investors. One note for
Gold members, your cryptocurrency assets are held in a new Robinhood Crypto
account, separate from your current Robin Hood financial accounts, and so are
treated as non-marginable with a 100 percent maintenance requirement. This
means that your cryptocurrencies can’t be leveraged or serve as collateral for
any equity margin accounts. As far as trading capabilities go, you’ll be able
to place both market and limit orders for buys and sells. Which for beginner
crypto traders who are only exposed to Coinbase and not making use of Gdax,
this is a huge leap forward. Limit orders are extremely useful trading tools when
managing “blockfolio” risk. Unless you’re a Puritan when it comes to
HODL’ing. Limit orders can protect you from the dramatic
downsides and large losses, when it comes to stomach-turning dips. And comparing
Robinhood and Coinbase, in terms of fees. Forget about it!
You’re comparing Robinhood’s absolutely zero fees to Coinbase’s dirty
laundry list of them. Coinbase fees are just as absurd as what you’d expect to get charged
from buying lemonade from that T-Mobile child. When buying on Coinbase, your purchase
price is subject to a 1 to 2 percent spread over market. Of which, Coinbase
pockets the difference. And if you’re a Visa or Chase customer you may have been
charged fees from them, as well. Not only that, but Coinbase also
charges you conversion fees, bank transfer fees, credit card fees, variable
network transaction fees, the “standing on my lawn” fee. Okay,
I think you get the point. So viewers may be curious how Robinhood actually makes
money. Their revenue stream consists of gold membership fees that start as low as
$6 a month, and allow users to skip the three-day
waiting period for deposits and make trades instantly. As well as to borrow up
to double the amount of money in their account to trade on margin with leverage.
A 5% APR interest charge on margin that exceeds 50K, interest they collect on
members unused cash balances that are invested in money market accounts. A
revenue stream enhanced by the Federal Reserve’s gradual tightening of the
federal funds rate. They also earn money from rebates they get for directing its
order flow to broker-dealers. This may sound shady, but it’s actually a common tactic
used by discount brokers across the board to generate revenue streams simply
by directing their exchanges trade orders to certain trading venues. And of
course, they balance their budget by cutting a lot of expenses by maintaining
a lean engineering team and not having any of those traditional
brick-and-mortar locations for their customers. Expanding into
cryptocurrencies in this climate, is a risky venture, to say least. Especially
for an already successful, but young stock trading app. So what does Robin
Hood hope to gain from doing this? It’s clear, that the
founders, seen here, posing in what appears to be a high school senior portrait
together; are fans of crypto. In an interview with Business Insider,
co-founder Baiju Bhatt, said that, “crypto is going to change the world and we want
to help drive that.” While his other half, Vlad Tenev, told CNBC in a phone interview
that it’s becoming more clear to him that Bitcoin is an investing asset. It’s
simple really. At the core of this strategy is customer acquisition and
user growth. In fact, the founders have stated repeatedly that they plan to
break-even on this, and not to profit directly from adding crypto. When talking
business strategy, it’s important to keep in mind their core customer base.
Considering they’re a millennial focused company, with a reported 78% millennial
age, between the age of 18 to 35, with an average age 26. For many millennials,
investing in Bitcoin on Coinbase is their first direct investment and so it
serves as their introduction to investing in financial markets. This also serves as
yet another way for the company to differentiate their service from
competing traditional online stock brokerage firms. As the crypto market
matures and Millennials become more involved in investing in both the
traditional stock market and in new cryptocurrency digital assets, it’s my
opinion, that this is an ingenious strategy. That if carried out carefully
to avoid any major mishaps with security or regulatory issues, could be the
perfect mix of risk and reward necessary for the young FinTech startup to
continue to disrupt an age-old industry that has struggled to keep pace with the
rapid rate of innovation. With that being said, I should give credit to their
competitors, who, well don’t allow direct trading of Bitcoin, do offer customers
more sophisticated financial products. Both E*Trade and TD Ameritrade offer
Bitcoin futures on their trading platforms.
After the CME and CBOE launched each of their respective Bitcoin futures in
December. Further blending cryptocurrencies into
mainstream finance. Will Robinhood’s be a successful strategy? Only time will
tell, at least so far the bold move has appeared to have been wildly successful,
with the company releasing a statement boasting that, “Over the past few weeks
we’ve been overwhelmed by the enthusiasm and are excited to contribute to the
cryptocurrency community in a meaningful way. We reached four million users and
well over a hundred billion in transaction volume… leading to over 1
billion in commissions saved in equity trades. With the release… we’re continuing
our mission of making the financial system work for everyone, not just the
wealthy.” And much like the growth trajectory of stocks that add blockchain to
their name, the growth of the privately held Silicon Valley startup, also appears
to have gone parabolic. In April of last year, TechCrunch confirmed that Robinhood had
raised 110 million in Series C funding, at a cool 1.3 billion valuation which
was led by venture capitalist firm DST Global. I mention them not only because
they’ve been big league investors in a number of “bigly” successful tech
startups, but because they appear to be the lead investor, again. In an all new
funding round, just one year later. In which, Bloomberg reports that the new
round values Robinhood at 5.6 billion, with an expected 350 million raised.
Which would rocket launch the value from 1.3 to 5.6 billion in a single year.
That’s more than 3x growth. Try getting that from an altcoin. It will be
interesting to see if they can live up to investors perhaps, irrationally
exuberant expectations. Well heck, with all this money floating around, that begs
the question of competition. Well Sir Robin won’t have to travel farther than
San Francisco to find America’s favorite cryptocurrency exchange, Coinbase. But
with only five states at launch, compared to Coinbase’s 36, including New York,
Robinhood won’t pose an immediate threat. That’s because Coinbase has reportedly
13 plus million users globally. Compared to Robinhood’s domestic four million.
Which includes the wait-listed 1 million crypto hopefuls. Globally Robinhood has
struggled to expand its services past U.S. borders. Including its compromised journey
to gain access into China and its prolonged regulatory efforts in Australia. However,
Robinhood has boasted a cumulative 100 billion in trading volume, compared with
Coinbase’s 50 billion. Though, Coinbase appears to be placing greater attention
towards institutional money with the upcoming release of their index fund.
Robinhood remains to be focused on retail. Overall, I expect Robinhood
Crypto to be a hit for all the same reasons Coinbase is. It’s app’s beautiful
simplicity and easy to navigate user interface. Lastly, while Robinhood is the
only location to trade free and seamlessly between crypto, stocks, and
that fiat burning a hole in your pocket. It’s not the only free crypto game in
town. Traders can also invest in crypto free using Revolut,
Circle, which recently acquired Poloniex, or Cobinhood. If that name sounds
suspiciously familiar, Robinhood thought so, too.
Releasing a company statement that Robin Hood has no affiliation with Cobinhood,
which is confusingly similar in name and branding. In order to protect our brand
Robinhood sent a cease and desist letter requesting that Cobinhood cease
its use of the Cobinhood name and branding. Oh ho, the gloves are off! Grab your
briefcases boys, cause we’ve got a legal battle. And, hey, I’m no legal expert but
those Cobinhood fellas knew where the matzah was. If you don’t currently but are
interested in creating a free Robinhood account feel free to use my referral
hood link below, in the description. If you do, both you and I will receive a
free share of randomly selected stock, such as one of these. It’s free, easy and
will help support this channel. So when you do sign up, let’s hope it’s Apple.
Because I don’t want any of my viewers to get burned, please note that crypto
currencies are extremely volatile investments. In case, everyone hasn’t told
you that already. So please, do your own
research before investing and never solely depend on the advice of anyone,
especially YouTubers when investing your own money. And that goes for any type of
investment. I am NOT your financial, investment, or crypto advisor. This
channel is just to share my personal opinion on items I find interesting and
entertaining related to cryptocurrency. Most importantly though, if you learned
anything interesting or just found this video entertaining at all, please “like”
and “subscribe” below. Every sub counts so go ahead make your vote matter. And
lastly, I would love to learn more about my viewers, so tell me about yourselves.
What’s your familiarity with cryptocurrency or investing? Do you think
crypto is just a fad or the future of finance? Or if you just have any
suggestions on how I can improve my content, let me hear it, down below.

5 thoughts on “Robinhood Crypto Review”

  1. Why doesn’t Robinhood Provide us Real Crypto Coins with Crypto Private keys Etc.? That is the deal breaker between RH & Coinbase…

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