Stock trading mobile app provider Robinhood is jumping on the crypto-trading bandwagon.
Announced today, the company, which was founded in 2013 as a way to democratize stock trading, said it plans to roll out bitcoin and ether trading services via its mobile apps next month. Not only does the company hope to attract cryptocurrency enthusiasts to its more traditional products, but it’s also launching the service to catch some of the momentum cryptocurrency has seen as of late.
“We’ve come to understand that cryptocurrencies as an asset have exhibited clear and underlying resiliency and have integrated themselves as part of a diversified and balanced portfolio,” Robinhood co-founder and CEO Vlad Tenev told CoinDesk.
To start with, the service will only be offered to users in California, Massachusetts, Missouri, Montana and New Hampshire, but more states are set to follow.
The company, which is regulated in the U.S. by the SEC and the Financial Industry Regulatory Authority (Finra), plans to offer the crypto trading service for free. Plus, it promises instant transfers on cryptocurrency purchases for amounts of $1,000 or less, a significant improvement on the time it generally takes for people to buy cryptocurrency for the first time.
“We view entering crypto as a way to extend our user base and build our brand.”
Crypto meets stock
While offering the service for free could seem risky, Tenev said, the company hopes to attract investors from the $550 billion cryptocurrency industry to the platform and its products, which already provide revenue streams.
Specifically, the firm charges for a premium service called Robinhood Gold that enables margin trading and after-hours trading. The company also generates revenue by collecting interest on cash and securities in user accounts similar to a traditional…