The stock-trading smartphone app Robinhood, which has amassed 3 million users and recently raised $110 million at a $1.3 billion “unicorn” valuation, is jumping into cryptocurrencies.
Robinhood Crypto will launch in February with no-fee buying and selling of bitcoin and ether (token of the blockchain network Ethereum), but in only 5 states: California, Massachusetts, Missouri, Montana, and New Hampshire. (The company says it determined those states “based on a mix of strategic and regulatory considerations.”)
The move represents new competition for Coinbase, which is the No. 1 mainstream brokerage for buying bitcoin and has more than 13 million users, but has been criticized for its occasional exorbitant fees, which vary based on network activity at the time you want to buy or sell.
Robinhood charges users no commission fee. It makes its revenue from premium services like Robinhood Gold, which offers margin trading and extended-hours trading for $10 per month, and from interest on outstanding cash sitting in user accounts.
The aim of Robinhood Crypto, the company says, is to “expand our user-base, which will in turn grow our existing revenue streams such as Robinhood Gold.” Last year, Robinhood added a web version of its service, and added options trading.
Robinhood is also immediately adding charts and custom price alerts for 16 different coins: bitcoin, ether, litecoin, ripple, bitcoin cash, bitcoin gold, ethereum classic, Zcash, dash, monero, stellar, lisk, Qtum, OmiseGo, NEO, and dogecoin.
When Robinhood first launched in 2014, critics feared that it made buying stocks so easy for millennials it could be financially dangerous—college students clueless about the stock market could now deposit money directly from their bank account and go on a spree with a few taps of their fingers.
But the current cryptocurrency investing mania is a better example of those fears manifested: bitcoin is up 1,130% in the past 12 months, ether is up 9,670%. And now Robinhood is getting in. Consider it a warning shot to Coinbase.
NOTE: The list of coins Robinhood will offer on its crypto watchlist was updated after Robinhood changed the list from its initial press release.
Daniel Roberts covers bitcoin and blockchain at Yahoo Finance. Follow him on Twitter at @readDanwrite.
This article was curated from Google News. You can read the original article here.