Robinhood, the free stock trading app, is going to offer free bitcoin and ethereum trading in February.
The company says the services will provide users a superior experience to existing cryptocurrency trading platforms.
Robinhood, the California brokerage known for popularizing free stock trading, is diving into the world of cryptocurrencies with Robinhood Crypto.
The firm announced Thursday that users in 5 states would be able to trade Ethereum and bitcoin 24/7 on its app for free starting in February. Customers will also be able to track 16 other cryptocurrencies including Monero, litecoin, and Dash.
Baiju Bhatt, the cofounder of Robinhood, told Business Insider that cryptocurrencies are something he and his cofounder Vlad Tenev have been thinking about for a while.
“Back in 2010 or 2011 we were mining bitcoin,” Bhatt said in a telephone interview. “If we noticed one thing about cryptocurrencies it is that they have this incredible resiliency to them.”
Robinhood, which has been a darling of younger and inexperienced traders, has been expanding its offerings over the course of the last year. The company rolled out margin trading via Robinhood Gold, and late last year it launched a web platform and started offering free options trading.
The new cryptocurrency offering, according to Bhatt, is tied to Robinhood’s ethos of democratizing financial services and toppling the old guard of Wall Street.
“Crypto is going to change the world and we want to help drive that,” he said.
Robinhood would be one of the first non-crypto companies to try to break into the cryptocurrency trading market which is known for outages, high-fees, and long periods of downtown. Bhatt said the company is prepared to onboard new clients and handle volumes.
“Today our business transacts 10,000 different symbols in equities and ETFs. We see millions of trades a day. In our brokerage industry there is not excuse for down time. We plan on bringing that mind-set to the crypto space. We don’t view any of that stuff as acceptable.”
Still, the service will only be available in California, Massachusetts, Missouri, Montana, and New Hampshire.
Square, the online payments company founded by Twitter’s Jack Dorsey, has been running a trial that allows users of its Cash App to buy and sell bitcoin.
From a business standpoint, Bhatt said the move is a customer acquisition play. The firm has already racked up over 3 million users. Bhatt sees cryptocurrency bringing that number to new heights.
“We are going to break-even on this,” he said. “But it could dramatically increase user growth.”
Robinhood is valued at $1.3 billion, according to the company, and has raised over $170 million. The firm has declined to comment on its profitability