Robinhood will provide crypto trading services on a breakeven basis, giving customers the ability to combine trading crypto with traditional investments in a single app.
Many of the startups dealing in crypto are upstarts with questionable track records. But five-year-old Robinhood has raised $176 million from top investors that now value the company at $1.3 billion. There’s long-term benefit to rolling up crypto traders and using the feature as a wedge to get them to hold money with Robinhood where it earns interest, and pay for Robinhood Gold premium tier for $6 to $200 a month that lets them borrow between $1,000 and $50,000. Demand for the product was clear. 100,000 of Robinhood’s users were regularly seaching for crypto pricing and trading in its app, and 95% of those surveyed said they’d invest in cryptos if the product supported it. Robinhood even had to send a cease-and-desist to “Cobinhood”, a competing crypto trading app that cribbed its name and raised $10 million in an ICO.