Coinbase faces strong competition, Robinhood will add zero-fee cryptocurrency trading services

Robinhood, a commission-free stock trading app, announced that it will open Bitcoin and Ethereum transactions in February. Compared with Coinbase's 1.5%-4% transaction fee, Robinhood's biggest advantage is zero transaction fees. From today, Robinhood will allow its users to track the prices, news, and set alerts for 14 digital currencies, including Litecoin and Ripple.

"We plan to operate this business on a break-even basis and we do not plan to profit from it in the foreseeable future," said Vlad Tenev, co-founder of Robinhood. "The value of Robinhood's cryptocurrency trading service lies in expanding our customer base and better serving our existing customers."

If Robinhood's cryptocurrency trading business can replace its main business competitors (such as Coinbase), Robinhood is expected to expand to more than 3 million users. By trading traditional stocks, ETFs, cryptocurrencies, and options in the same application, Robinhood can further promote the cryptocurrency craze, cross-pollinate the two trading worlds, and attract more people to the cryptocurrency world.

Robinhood founders Baiju Bhatt (left) and Vladamir Tenev (right)

It is reported that Robinhood, which was founded five years ago, has raised US$176 million from top investors, including Andreessen Horowitz, Index and NEA. The company's current valuation has reached US$1.3 billion.

According to the official introduction, when you buy or sell an order on the Robinhood app, Robinhood will give you an estimated price, then connect to exchanges and market centers to find the lowest price, and use its economies of scale to gradually improve to get a better price. In order to combat market fluctuations, Robinhood will set up a "loop" in your transaction, and if it cannot be traded at a price close to the estimated price, it will wait or notify you.

It is reported that the cryptocurrencies currently tracked by Robinhood include Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Ripple, Ethereum Classic, Zcash, Monero, Dash, Stellar, Quantum Chain, Bitcoin Gold, OmiseGo, NEO, Lisk and Dogecoin.

When Robinhood launched cryptocurrency trading services in California, Missouri, Montana, Massachusetts, and New Hampshire in February, only Bitcoin and Ethereum were available for trading, and other currencies would have to wait.

“We are very selective about the cryptocurrencies we offer on our platform,” Tenev said. “We launch these first because they are the most mature cryptocurrencies out there. A lot of people declared them dead, but they are coming back stronger than before.”

It is reported that Robinhood has enabled a new two-factor verification feature, including the integration of an authenticator application, to ensure that people's wallets are not stolen. "We recently hired several world-class talents who will be responsible for building internal systems."

To date, the Robinhood app has processed $100 billion in transactions, saving users more than $1 billion in transaction fees.