By Rishi Shah, Opinion Editor
Robinhood, the no commission and mobile trading platform, has announced its plans to enter the cryptocurrency trading market. With its already popular platform, this is going to send a shock-wave to the trading community. Users will now be able to trade stocks and cryptocurrencies all under one umbrella and zero trading fees.
While there are many platforms available to consumers, only a handful of mobile apps exist. Mobile applications such as Coinbase and Binance provide a user friendly interface where you can easily transfer currencies and invest in their limited set of available coins. Each app has a similar user interface, you get a unique user code and you can use that to transfer the currency between various platforms.
When Robinhood officially the launches cryptocurrency options to its platform, users will be able to invest in Bitcoin and Ethereum for now. These are the two most developed and traded coins available in the market. While each platform provides various options, they almost always include Bitcoin and Ethereum as the standard options as they do not fluctuate to the extent that other coins do when a new platform adopts them.
So with all these mobile options and platforms available, why is this such a huge deal? There are two answers to that. First, whenever a new coin is added to a popular platform, the trading prices skyrocket. Bitcoin and Ethereum are already on multiple platforms, so these prices may not surge but, when a newer and lesser known coins join in, they soar. You can look at the example of Litecoin, which had a 300% surge in 24 hours when it was introduced to Coinbase. This move was heavily criticized as many reports of insider trading came out.
Secondly, Robinhood is a well respected player in the trading industry. With the adoption of cryptocurrencies into their already massive user base, this further legitimizes the use of cryptocurrency. There is much pushback against the use and trade of digital coins as they represent no “physical value” or do not have a government backing it.
Robinhood is known for their massive growth and influence on the trading market. This mobile application truly revolutionized trading stocks. For better insight, we can look at E-Trade, an online trading company that was started in the 1980’s. Their user base has around 3.6 brokerage accounts in its decades of existence whereas Robinhood surpassed 4 million since 2014. Robinhood already has wait lists of 1.25 million users for the cryptocurrency platform and is already allowing trading in 5 states. Having cryptocurrencies available at the swipe of a finger without fees will truly revolutionize trading and reach of this new form of currency.
A version of this article appeared in the Tuesday, February 27th print edition.
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