Cryptocurrency, especially Bitcoin, seems to be getting more mainstream every day. Tesla CEO Elon Musk recently announced the acquisition of $1.5 billion of bitcoin on Tesla’s balance sheet and kicked up investors’ interest more than ever before.
If you’ve traded stocks and want to start trading cryptocurrency, you may want to start on Robinhood. Robinhood mainly supports stocks, but it also supports 4 cryptocurrencies: Bitcoin, Litecoin, Ethereum and Dogecoin.
How to Open an Account
Follow these easy steps to open a Robinhood account and get started trading crypto.
Step 1: Download the Robinhood App
If you don’t already have the Robinhood app, you’ll need to download it on the app store. You can get Robinhood on iOS and Android, or you could make an account on your computer.
Robinhood’s platform offers a streamlined user experience. Its goal as a company is to make investing accessible and simple for the average person. It features an intuitive user interface and if you’re just beginning to invest, start with Robinhood. Its mobile app lets you track your portfolio on the go.
The best part about Robinhood is that you won’t find any hidden fees, and there are no fees to deposit or withdraw from your bank account. You can opt into Robinhood’s premium service, which gives you access to financial derivatives, but this is completely optional.
Step 2: Create an Account
Creating an account on Robinhood is a quick and easy process. Signing up for a Robinhood account should take less than 10 minutes. To create an account, you need to give Robinhood some information about yourself, including your name, email, address and Social Security number.
Once your account is created, you’ll need to link a bank account to Robinhood in order to fund your account. To do so, you’ll need your bank account and routing numbers. Robinhood offers instant transfers up to $1,000, so you can start trading right away.
If you know a friend who uses Robinhood, ask for a referral code –– Robinhood currently has a promotion going on where you can earn a free stock with a referral code. Robinhood also offers Robinhood Gold as a premium service for as little as $5 a month. Robinhood Gold lets you trade with margin and deposit larger amounts of money.
Step 3: Make your Purchase
Once you fund your account, you can buy crypto on Robinhood. Simply search the cryptocurrency you want to purchase in the search tab and select the coin you want to buy.
You can choose to place a market order or a limit order for cryptocurrency on Robinhood. A market order purchases your crypto at market price, usually instantly. With a limit order, you set the price you’re willing to pay for the asset, and if a sell order at that price is processed then your limit order will be filled.
Unless you’re a HODLer, you’ll want to sell your cryptocurrency for a profit sometime in the future. It’s often a good idea to sell off your cryptocurrency incrementally so you don’t miss out on profits if your crypto keeps appreciating. Once you sell your assets on Robinhood, you can transfer funds to your bank account after a couple days.
How to Deposit Bitcoin and Other Cryptos on Robinhood
Robinhood recently announced it plans to enable deposits of Bitcoin and cryptocurrencies, including dogecoin. The capability was announced on Twitter, but no date for activation was shared. You can currently only buy and sell crypto assets within the Robinhood app.
How to Withdraw Bitcoin and Other Cryptos on Robinhood
The new option to withdraw crypto deposits also does not have a start date. Robinhood plans to communicate deposit and withdraw functionality soon. At this time, Robinhood doesn’t support coin withdrawals.
Alternatives to Robinhood
There are plenty of alternatives to buying crypto on Robinhood. The most common way to purchase cryptocurrency is through a cryptocurrency exchange or brokerage. Coinbase, Gemini, eToro and Binance are all great options.
These crypto exchanges have several benefits over buying crypto on Robinhood. For one, dedicated exchanges have more accurate market prices than Robinhood. It’s not uncommon for Robinhood to have a 2% to 3% difference in the cryptocurrency price. Also, crypto brokerages offer a wider variety of altcoins. Altcoins are any cryptocurrency other than Bitcoin.
Another benefit of using a cryptocurrency brokerage instead of Robinhood: You can trade against bitcoin. Instead of trading altcoins against their USD value, you can trade altcoins based on their value proportional to bitcoin, a great feature for anyone looking to increase the bitcoin value of their portfolio.
With Robinhood halting trades of certain stocks as of late, more investors are switching to other brokerages. Ultimately, you should invest with a brokerage that makes you feel comfortable.
Robinhood only supports 3 altcoins –– one of which is a meme. Robinhood supports 3 altcoins: Ethereum, Litecoin and Dogecoin.
Get Familiar with Buying Crypto on Robinhood
If you’re already familiar with Robinhood and don’t want to use a separate exchange for cryptocurrency investments, then you will have to make some sacrifices. (Check out Robinhood alternatives for more options.) Other than the lack of cryptocurrency variety, Robinhood doesn’t deposit any actual bitcoin into your account. With a cryptocurrency wallet, you truly own your crypto assets.
For some, the convenience of investing in crypto on Robinhood outweighs the lack of variety and pseudo-ownership. Investors who use Robinhood don’t have to track multiple brokerage accounts, learn new user interfaces or even know how to use Bitcoin.