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Trading Crypto on Robinhood: Top 14 FAQs (Frequently Asked Questions) You Always Wanted to Know the Answer!

Trading Crypto on Robinhood: Top 14 FAQs (Frequently Asked Questions) You Always Wanted to Know the Answer!

Robinhood is a fintech company that operates an online discount brokerage that offers its users commission-free trading. You can trade stocks, Exchange Traded Funds (ETFs), cryptocurrencies, and options. Trading crypto on Robinhood is easy and hassle-free. The services provided by Robinhood are quite similar to SoFi and TD Ameritrade.

 

Its advantages include US$0 fees, no requirement of account minimum, cryptocurrency trading facility, and streamlined interface. However, it has some drawbacks too. This streamlined trading platform doesn’t offer mutual funds and bonds and the customer support is poor. In fact, it doesn’t offer any retirement accounts either. Lately, Robinhood run afoul of regulators.

 

Robinhood Jobs and Company Culture

 

#1 Can you Trade Crypto on Robinhood? Can u Day Trade Crypto on Robinhood?

Yes, you can trade cryptocurrencies on Robinhood. Yes, you can day trade cryptos on this trading platform too. The best part is that it is very easy for day trading cryptos.

 

#2 Can you Day Trade Crypto on Robinhood without 25k?

Yes, you can make more than 5 intraday trades every week without requiring a portfolio of US$25,000. This is mainly because FINRA or the SEC doesn’t regulate cryptocurrencies as stocks and options.

 

However, there is a catch. In case, you have a Robinhood Financial account (which allows you to trade stocks and other assets also), which is demarcated as suitable for Pattern Day Trading, then purchase of Bitcoin other cryptocurrency will make the value of your stocks and cash to drop below the US$25,000. In that case, you’ll be prevented by Robinhood from placing a trade.

 

Let me explain it with an example. Suppose, your Robinhood Financial account value is US$25,500. Now, you place a buy order pof US$600. In that case, your account’s value will drop to US$24,900, below the US$25,000 value. As Robinhood Financial account trades stocks, ETFs, and options, it comes under the purview of FINRA or the SEC.

 

If you want to day trade cryptocurrencies only, then I suggest you to open a Robinhood Crypto account. This account will be part of the Robinhood Financial account but will not be regulated by either Financial Industry Regulatory Authority (FINRA) or the Securities Investor Protection Corporation (SIPC). Therefore, you’ll not be required to maintain a US$25,000 portfolio.

 

#3 Can you Trade Crypto on Robinhood 24/7? When can I Trade Crypto on Robinhood?

As the cryptocurrency market never closes, you can trade cryptocurrencies anytime or any day of a week. You can trade crypto 24/7 on Robinhood.

 

#4 What are the Fees for Trading on Robinhood? Is Trading Crypto on Robinhood Free?

Robinhood claims itself as a commission-free trading platform. However, nothing comes free in this world. They have many hidden costs.

 

To understand how they earn profit from you despite the US$0 commission charge, it is important to know their income source or revenue model.

 

It is important to note that Robinhood is basically a middleman between owners of Bitcoin and users who want to benefit from the price rise of the largest crypto. This streamlined trading platform makes money in 4 ways:

  • Interest
  • Premium accounts
  • Margin Interest
  • Price spread (in comparison to other cryptocurrency exchanges)

 

Therefore, it can be concluded that crypto trading on Robinhood is not free at all as there are many hidden charges (mentioned above).

 

#5 Can you Make Money Trading Crypto on Robinhood?

Yes, you can make money by trading cryptocurrencies on Robinhood. To make money, you have to sell your crypto at a profit. This is because this trading platform doesn’t allow you to make cryptocurrency withdrawals.

 

Another thing that needs special mention is that making a profit from a crypto trade is difficult on Robinhood in comparison to other exchanges because the price spread is larger on Robinhood. When you go to buy and sell Bitcoin, you will see that you are offered a BTC selling price higher than that of other exchanges.

 

Robinhood’s buying and selling prices will always have a larger spread than other exchanges, say, BitMEX. If it requires the BTC price to move up by US$20 on BitMEX for you to make a small profit, the BTC price has to move up by around US$40 on Robinhood for you to make a profit. Therefore, to make money on Robinhood is more difficult than any other leading cryptocurrency exchange even though the former charges you no commission.

 

#6 Does Trading Crypto on Robinhood Count as a Day Trade?

Cryptocurrency trading on Robinhood is not regulated by FINRA. Therefore, the Pattern Day Trader rule that is applicable for stocks, ETFs, and options is not applicable for crypto trading.

 

#7 Are Crypto Trades Limited on Robinhood? Can I Trade Crypto on Robinhood Unlimited?

No cryptocurrency trades are not limited to Robinhood because cryptos are not regulated by FINRA. Therefore, unlimited crypto day trading can be done on Robinhood.

 

#8 Can I keep my crypto on Robinhood?

No, you can’t withdraw cryptocurrencies from Robinhood. Once you buy crypto on Robinhood, you’ll have to sell it on the trading platform to realize a profit. Robinhood says that “you own the cryptocurrency assets” in your Robinhood’s crypto account and “you can buy or sell them at any time.”

 

If you are a HODLer and want to transfer the bought crypto to your wallet from Robinhood’s crypto trading account, it is not possible. So, hodlers of cryptos should try other cryptocurrency exchanges such as Coinbase for that case.

 

#9 Why can’t I trade on Robinhood Right Now?

You can’t trade on Robinhood right now because any of the following 3 reasons:

 

  1. It is a foreign stock and the Robinhood trading platform doesn't support it currently.
  2. It is an OTC (over-the-counter) stock or a warrant that is not supported on the Robinhood platform.
  3. It is the stock of a company that is currently undergoing corporate action. You can trade the stock again when the corporate action is finalized.

 

#10 Why can’t I Trade Bitcoin or XRP on Robinhood?

If you can’t trade Bitcoin BTC, Ripple XRP, or other cryptocurrencies on Robinhood, it may be because of the following reasons:

 

  • You don’t have enough cash or fund in your account for crypto trading. Always keep in mind that cryptocurrencies are non-marginable. Cryptos don’t count as collateral.

 

  • If you’re using Gold Buying Power to buy BTC or other cryptocurrencies, you’ll make the total value fall below the minimum required limit or balance of your Gold account.

 

  • Your crypto trading account on Robinhood would be restricted from trading crypto if there are restrictions on your Robinhood Financial account.

 

  • If your account is flagged as a pattern day trading account, you can’t trade because it’ll lead to a fall in the total portfolio value (stocks and cash) below US$25,000. However, you can buy Bitcoin, XRP, or other cryptocurrencies if you fund your account with the value of cryptos you want to buy.

 

  • XRP is not supported for trade on the Robinhood crypto platform. However, its value in real-time is shown on the trading platform.

 

#11 Which crypto can you buy and sell on Robinhood?

  1. Bitcoin BTC
  2. Ethereum ETH
  3. Ethereum Classic ETC
  4. Bitcoin Cash BCH
  5. Dogecoin DOGE
  6. Litecoin LTC
  7. Bitcoin SV BSV

 

Real-time market data is shown by Robinhood on the following cryptocurrencies by the Robinhood Crypto app:

  • Bitcoin Gold BTG
  • Dash DASH
  • Lisk LSK
  • Monero XMR
  • Neo NEO
  • OmiseGo OMG
  • Qtum QTUM
  • Ripple XRP
  • Stellar XLM
  • Zcash ZEC

 

#12 How to Buy Bitcoin on Robinhood? How does Trading Crypto on Robinhood Work?

The process of buying and trading Bitcoin and other cryptocurrencies involves the following steps:

 

Step #1: Visit the cryptocurrency’s detail page on Robinhood.

Step #2: Tap on the “Trade” button.

Step #3: Tap on the “Buy” button.

Step #4: Choose order type by tapping “Order Type” on the upper right.

Step #5: Confirm and submit your order.

 

The same process is involved if you want to sell your crypto. Instead of tapping the “buy” option, tap the “sell” option.

 

#13 Is Trading Crypto on Robinhood Safe?

Yes, trading crypto on Robinhood is safe and secure.

 

  • This is because most of the crypto coins traded on the platform are kept on cold storage wallets that are not connected to the internet. Only some of the coins, especially the ones that are required for supporting day-to-day operations are held on hot wallets (which remain connected with the internet).

 

  • In addition to secure storage, a portion of the assets is insured through crime insurance. This insurance protects against all crypto coins’ losses from cybersecurity breaches and other forms of thefts.

 

  • “Robinhood Crypto is registered with FinCEN as a money services business.”

 

  • Robinhood Crypto practices strict operational security while managing cryptos.

 

#14 Coinbase vs Robinhood: Is it Better to Trade Crypto on Robinhood or Coinbase?

Whether you want to choose between Coinbase or Robinhood for trading cryptocurrencies depends upon many factors.

 

  • If you are a cryptocurrency HODLer, you should choose Coinbase or other cryptocurrency exchanges over Robinhood. This is mainly because Robinhood Crypto doesn’t allow you to withdraw cryptos from your Robinhood’s crypto account. If you want to withdraw profit, you have to sell the crypto first on the platform itself and then withdraw the proceeds.

 

  • Robinhood is mainly available for US residents. However, Coinbase is available in over 100 countries.

 

  • While Coinbase offers trading support for 51 cryptos, Robinhood offers trading support to just 7 cryptocurrencies.

 

  • Coinbase offers more transaction support.
  • Buy, sell, send, receive, and exchange support are offered by Coinbase.
  • Buy, sell, and Limit Orders are offered by Robinhood.

 

  • If you want to trade stocks, ETFs, options, and cryptocurrencies from a single platform, Robinhood provides you that facility. However, Coinbase only offers crypto trading and holding facilities.
  • Fees:
  • Coinbase:
  • 0.50% fee per trade
  • 3.99% fee for credit card purchases
  • 1.49% for Coinbase wallet or bank account purchases
  • Robinhood:
  • $0 commissions are charges. However, multiple hidden charges are applied including interest, premium accounts, margin interest, and larger price spread.

 

All comparative information is given above. Now, you have to decide, which one would you choose, Coinbase or Robinhood.

 

Buy Cryptocurrencies, Stocks, and Gold Now

If you are ready to invest in stocks and cryptos or buy Bitcoins through online brokerage accounts of centralized or decentralized cryptocurrency exchanges, you can do so in a legit way by investing through stock investing and cryptocurrency apps. You have to open an account with such an exchange or online broker (including trading apps and investment apps such as TD Ameritrade). Then verify your details (including basic personal information) and fund your stock or cryptocurrency trading account.

 

The best thing about Bitcoin and other cryptocurrencies is that the transactions are done without the involvement of banking entities. This is one of the reasons why more and more investors (including corporates, venture capitals, and institutional investors) are heavily investing in cryptos.

 

You can start depositing funds to your stock or crypto exchange account to buy company shares or cryptocurrencies. This can be done by simply connecting your online banking account (savings accounts, checking accounts, or other account types). Besides transferring fiat currency money online through bank transfer, you can make payments with credit cards, debit cards, etc.

 

If you need further assistance, you may consider taking help from the vibrant and helpful trading communities. You can trade cryptos with credit cards (business credit cards, personal ones, or Citi custom cash cards), debit cards, or other payment options through reliable crypto trading web platforms.

 

You can also check the savings calculator to know how much you should save on a weekly, monthly, or yearly basis. Check the financial news to know more about the prospects of various assets so that you can build long term wealth.

 

In case you are bullish on the future prospects of gold, stock and ETF trading, Bitcoin BTC, Ethereum ETH, Bitcoin Cash BCH, Litecoin LTC, Ethereum Classic ETC, Bitcoin SV, Wrap Bitcoin, and other altcoins, you can start investing in stocks, gold, Bitcoin, and other altcoins with USD. Once bought, transfer them to:

  • hot wallets (including mobile app wallets and software wallets) or
  • cold wallets (including most secure hardware wallets)

 

Hold them for a longer time period to let the Bitcoin BTC price increase. Keep your cryptocurrencies safe with:

  • Ledger Nano S
  • Trezor One
  • Other Ledger and Trezor models

 

Crypto investing will provide you a higher return in the long run. The ROI from crypto investment is much more than investing in:

  • Stocks
  • Mutual funds
  • Index funds
  • Real estates
  • Yield savings accounts
  • Real estate investment trusts
  • Fiat currency trading (forex trading)
  • CD rates
  • Money saving in savings accounts
  • money market returns
  • Exchange traded funds
  • IRA accounts, and others.

 

In fact, many retirement funds or IRA accounts such as Roth IRAs are allowing digital currency investors to purchase XRP, Bitcoin, Chainlink, and other digital assets. These retirement funds are increasing investor choice by allowing them to invest a small percentage of their money in cryptocurrencies. This is, in turn, increasing the prospects of these funds to provide their investors to get higher returns. If you are thinking about building wealth, you should include cryptos in your portfolio like other crypto investors.

 

Therefore, it can be concluded that holding Bitcoin Ethereum and other cryptos can help you to build real wealth and multiply your net worth. You can learn investing basics to buy crypto currency and other digital assets to make more gains. Start going through Wall Street Journal and other investing magazines on cryptos to learn more about investing in cryptocurrencies and make better financial decisions. Learn about valuation calculation to true bitcoin value and assess the overpriced or underpriced situations instantly.

 

As a beginners guide, you may also check out the trading basics provided by various cryptocurrency exchanges such as Coinbase, Binance, Kraken, and other crypto APIs. There are many brokers suitable for beginners as well. So, read reviews of customers before joining a crypto exchange. There are many brokers for beginners in the USA through which you can trade and invest extra cash and investible fund in fractional shares and stocks funds.

 

You should definitely learn about:

  • Trading for beginners (Step By Step guide)
  • Types of stocks including penny stocks, value stocks, growth stocks, blue-chip stocks, etc.
  • Gold standard
  • Futures contract
  • Gold miner, gold mining company, and gold mining stocks
  • Bad debt and bad credit
  • Home equity
  • Employment tax records and receipts
  • Periods of limitations
  • How credit score is determined?
  • World gold council
  • How is the price of gold and other precious metals determined?
  • How to rent out your car to make money
  • Significance of owning gold
  • Stock plans
  • Fixed income assets
  • Stocks and Funds
  • Spot price and futures price of gold
  • Write an eBook to start making money
  • Use spare time and personal internet connection to earn extra cash through part-time graphic design
  • Asset allocation
  • Investment gold
  • Different ways of buying and selling golds
  • How to make money from Google adsense?
  • Gold stocks
  • Utilizing market news for profit
  • Significance of Dow Jones in the stock market
  • How to increase your disposable income through balance transfers credit cards?
  • Different trade ideas
  • Warren Buffet’s investing styles
  • Passive investors
  • Different investment goals
  • Teaching as a private tutor in your free time
  • Cash Management
  • Investing for beginners
  • How to choose brokerage firms and stock exchanges?
  • Gold markets
  • Trading strategies for beginners to time your entry and exit
  • Using price actions to one’s advantages
  • Teach english to earn lot of money online and start saving
  • Browsing websites can also help you earn little extra cash
  • Margin Requirement
  • Margin Call
  • Margin Account
  • Day Trading Margin
  • Trend Trading
  • Market Maker
  • Options trades
  • Fundamental Analysis
  • Short Sell
  • Market Research
  • Success Rates Of Day Trades
  • Trading Vs Investing
  • Swing Trading
  • Time Frames Of Trading
  • Successful Ways Of Buying Stocks And Cryptos Throughout The Day
  • Risk Management
  • Financial Industry Regulatory Authority
  • Trade On Margin,
  • Foreign Exchange Trade
  • Pattern Day Traders
  • Day trading rules
  • Active trading
  • Secrets of a successful day trader
  • Stock price actions
  • How to pay off debt quickly
  • Planning for retirement
  • IRA guide and fruitful ways of increasing returns of individual retirement accounts
  • Stock price determinants
  • Charles Schwab’s modern approach to investing and retirement
  • Day Trading Tools, trading software, and different financial tools.

 

Defi tokens and NFTs (Non Fungible Tokens) are the next generations of crypto coins. These decentralized coins have started to become very popular among active traders who trade cryptocurrency. You can buy and sell them through cryptocurrency trading platforms too.

 

Whether you buy Ethereum ETH or buy Dogecoin, you should also invest in:

  • Chainlink LINK
  • Litecoin LTC
  • Binance Coin
  • Cardano ADA
  • Polkadot DOT
  • Dogecoin DOGE, and
  • Trade Litecoin LTC for better diversification of coins

 

To diversify your portfolio, you may also buy stocks through stock brokers for beginners and pro.

 

Get better guidance on improving your personal finance, retirement planning, management of cash flows or capital gains, and investment ideas from financial advisors, investment managers, and wealth managers, especially the ones who are not averse to cryptocurrencies such as Bitcoin and others.

 

While day trading, you should always try to invest only that much money which you can afford to lose. When you do margin trading, be very careful. Financial protection must be there in your mind always while you make cryptocurrency trades. That’s why having a secure financial plan is so important.

 

Invest money in stocks, gold, and other cryptocurrencies through centralized or decentralized exchanges and reliable online brokers.

 

Choose NapBots to Increase ROI

Trading Robots (such as NapBots.com) automatically scans the market in real-time and trades for you. They run 24/7, which means that you can keep earning your passive income even when you are sleeping. This gives you an edge over other investors as it enables the bot to book profits on your behalf when other investors are sleeping.

 

Smart crypto investors always remain prepared to get the best of a big market move. They don’t wake up suddenly. To remain alert round the clock, they use cryptocurrency trading bots so that they don’t miss any big market movement.

 

NapBots.com is a Trading Bot, cloud-based platform, on which you can connect to major exchanges such as Binance, Bitmex, Bitfinex, OKEX, Kraken, Bitstamp, and Bitpanda.

 

The best thing about the Napbots trading software is that you don’t have to monitor charts and candles to predict your next move. Any novice trader with zero skills can also start trading like a pro and earn money with this unique trading tool. Let Napbots take full control over your trades in just a few clicks. Now, sit back and enjoy earning money.

 

You may also check “Napbots Review - Simple Way To Increase Your Crypto Returns” before taking the plunge.

 

What’s so special about NapBots?

NapBots crypto trading software is special because it comes with:

  1. A unique trading algorithm that processes market data for you
  2. A unique crypto trading bot library so that you can create your own mix of trading strategies
  3. Autopilot mode that enables you to automate trading 24x7
  4. An easy-to-use interface so that you can copy the proven strategies of NapBots to make successful trades and make money

 

How to Get Started with NapBots?

NapBots is easy to start with. It involves just 3 steps:

 

Step #1: Connect to one of the available trust exchanges.

Step #2: Select from the unique list of performing Bots of NapBots

Step #3: Choose a plan that suits your investment style

 

Once you have completed these three steps, NapBots is ready to trade cryptos and earn money for you. Happy Trading!

 

Why Choose NapBots?

  • NapBots offers complete trading automation solutions through the use of its own tested trading strategies; offering quantitative trading strategies previously reserved for hedge funds to the public.

 

  • The setup and installation process are easy. So, the non-experts can also use it. The simple and special approach of NapBots helps it provide you with excellent ROI.

 

  • The team of professionals behind NapBots has extensive experience in the financial market. They have put their years of experience in place so that you can easily automate the management of your funds with no technical skills. This service can run 24/7 and work as your passive source of revenue even when you sleep.