Ought to You Use Robinhood to Purchase Bitcoin?

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Robinhood is greatest often called the inventory buying and selling app that pioneered the idea of commission-free buying and selling a number of years earlier than most brokerages removed their buying and selling prices. However you can even purchase Bitcoin and 6 different cryptocurrencies straight by means of the app.

Like all cryptocurrency buying and selling platforms, Robinhood is not the only option for everybody. Here is a rundown of the important thing benefits and downsides of utilizing Robinhood to purchase Bitcoin.

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Advantages of utilizing Robinhood to purchase Bitcoin

Robinhood pioneered commission-free inventory buying and selling a number of years in the past, and whereas its rivals have largely caught as much as the corporate’s pricing construction within the brokerage facet of the enterprise, the identical can’t be mentioned of cryptocurrency buying and selling.

Particularly, lots of Robinhood’s high rivals have costly and considerably hard-to-understand pricing constructions. For instance, Coinbase costs a 1.49% buying and selling charge for many transactions, so if you wish to purchase $500 price of Bitcoin, you pay about $7.50. And that is on high of a markup, or unfold, you pay over the present market value. To be truthful, Robinhood makes cash from the unfold between its present purchase and promote costs, however that is it — no different charges apply.

There’s additionally worth in having your cryptocurrency holdings and inventory investments in the identical easy-to-use app, and Robinhood actually allows you to try this. Many individuals take a look at Bitcoin as an addition to their funding portfolios, so it makes lots of sense to maintain your entire investments in a single place. With Robinhood, you may. With many different cryptocurrency exchanges, not a lot.

Drawbacks of utilizing Robinhood to purchase Bitcoin

By far, the most important downside to Robinhood’s cryptocurrency buying and selling platform is that all you are able to do is purchase, maintain, and promote your cryptocurrencies. In different phrases, you cannot ship your Bitcoin to a different cryptocurrency pockets, spend it on real-world purchases, or obtain Bitcoin from different individuals. It does not have almost as a lot performance as most main cryptocurrency exchanges do.

Robinhood additionally provides far fewer instructional assets and different options. It’s primarily a spot the place you should purchase, maintain, and promote Bitcoin and some different varieties of cryptocurrency. In case you purchase Bitcoin on Robinhood and it goes up in worth, you may promote it and generate profits. However there aren’t many different causes to make use of Robinhood in your cryptocurrency wants.

Lastly — and this level will not apply to buyers who solely wish to purchase Bitcoin — extra avid cryptocurrency merchants will discover that there are different platforms with much more cryptocurrencies to select from than the seven Robinhood provides. If you wish to put money into Bitcoin and the opposite hottest digital property, Robinhood most likely has what you want. However in case you’re considering of placing a few of your cash in smaller, up-and-coming cryptocurrencies, you may wish to look elsewhere. For instance, Coinbase provides greater than 90 tradeable cash.

Ought to you use Robinhood to purchase Bitcoin?

The brief reply is that it relies upon why you wish to purchase Bitcoin. In case your objective is to pay for purchases utilizing Bitcoin, or if you wish to ship Bitcoin to mates or to an exterior Bitcoin pockets, Robinhood isn’t the only option for you. Alternatively, in case your objective is just to carry Bitcoin and profit from rising costs over time, Robinhood could be a straightforward and low-cost strategy to do it, particularly in case you’re already utilizing the platform for inventory buying and selling.

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