Robinhood Brings Commission-Free Crypto Trading to Michigan

Siamak Masnavi
  • Robinhood's crypto trading service, "Robinhood Crypto", available via a mobile app, can now be used by customers in Michigan. 
  • This means that Robinhood Crypto is now available to residents of the following U.S. States: California, Colorado, Massachusetts, Michigan, Mississippi, Missouri, Montana, New Mexico, Wisconsin, Florida.
  • Using Robinhood Crypto, it is possible to buy/sell/hold BTC and ETH, and get real-time market data for BCH, BTG, DASH, DOGE, ETC, LSK, LTC, XMR, NEO, OMG, QTUM, XRP, XLM, and ZEC.
  • Robin's mobile trading app also lets you invest commission-free in (U.S.) stocks, options, and ETFs. 

The FinTech startup Robinhood's very popular "Robinhood Crypto" service, which allows customers to do commission-free trading of Bitcoin (BTC) and Ethereum (ETH) via a simple and elegant mobile app, has now expanded to Michigan.

This service, which was launched on 22 February 2018, initially was only available to customers in the U.S. states of California, Massachusetts, Missouri, Montana, and New Hampshire, with the promise that it would come to more states as the company managed to obtain regulatory approval. Since then, six more states have been added: Colorado (on April 20th), Mississippi (April 26th), Wisconsin (May 3rd), New Mexico (May 3rd), Florida (May 8th), and finally, the most recent addition, Michigan (May 9th).

Robinhood's mobile app is available for both Android and iPhone. It allows commission-free trading of U.S. stocks, options, ETFs, as well as cryptocurrencies, all in one app. Currently, it is possible to only buy, hold, or sell Bitcoin (BTC) and Ethereum (ETH), but the plan is to support trading of other popular cryptocurrencies later. In addition to real-time market data for Bitcoin (BTC) and Ethereum (ETH), you can get market data for fourteen other cryptocurrencies: Bitcoin Cash (BCH), Bitcoin Gold (BTG), Dash (DASH), Dogecoin (DOGE), Ethereum Classic (ETC), Lisk (LSK), Litecoin (LTC), Monero (XMR), NEO (NEO), OmiseGO (OMG), Qtum (QTUM), Ripple (XRP), Stellar (XLM), Zcash (ZEC)." As for historical price data, the app allows the user to see how prices have fluctuated over the past 24 hours, one week, one month, one year, and five years.

Although Robinhood's large user base, commission-free crypto trading, and beautifully-designed mobile app help it to be a very strong competitor to Coinbase in the United States, especially amongst millennials, Robinhood is not a direct competitor since it has two serious limitations.

First, it does not allow you to withdraw the coins they are holding for you, i.e. you can only sell them for fiat. However, Robinhood plans to support this feature "in the near future."

Second, you cannot deposit into your Robinhood crypto wallet existing coins that you may have on other wallets. This is what the FAQ section of the Robinhood Help Center has to say on this matter:

We currently don’t allow transfers of your existing cryptocurrency assets into your Robinhood Crypto account. Our primary concern is to prevent money from illegal activity being used for transactions on Robinhood Crypto. We’ll be sure to update you if and when this type of transfer becomes available.

Robinhood Help Center

In United States, amongst the few companies that offer commission-free crypto trading, Robinhood's closest and strongest competitor is the Goldman-backed startup Circle Internet Financial with its "Circle Invest" app, which got launched on 13 March 2018, is available in 46 states instead of 11, and which offers trading in five additional cryptocurrencies: Bitcoin Cash (BCH), Litecoin (LTC), Ethereum Classic (ETC), Zcash (ZEC), and the most recently added, Monero (XMR).

U.S. SEC Needs More Time to Consider VanEck Bitcoin ETF Proposal, Invites Comments

The U.S. Securities and Exchange Commission (SEC) announced on Monday (May 20) that it needed more time to consider the VanEck–SolidX Bitcoin ETF proposal. This delay also gives interested parties more time to comment on the proposal and address the SEC's main concerns. 

On 30 January 2019, Cboe BZX Exchange ("BZX") filed with the SEC a proposed rule change to list/trade shares of "SolidX Bitcoin Shares", which would be issued by the VanEck SolidX Bitcoin Trust. This proposed rule change was published in the Federal Register on 20 February 2019. It then had 45 days to approve, disapprove, or ask for a delay.

(Note, however, that BZX had filed its original proposal back in June 2018; the SEC delayed a decision on this proposal several times, and February 27 was the final deadline for the SEC to make a decision. However, due to the U.S. government shutdown that occurred in December 2018 and ended in January 2019, the SEC was partially out of action during this period. By the time that the SEC fully operational again, there was only a few weeks left till the final deadline. So, to give this Bitcoin ETF proposal the best chance of success, on 22 January 2019, BZX withdrew its original proposal, and re-applied (in order to reset the clock) on 30 January 2019.)

Anyway, on 29 March 2019, the SEC released a notice to say that it had selected 21 May 2019 as the date by which it should approve, disapprove, or ask for a further delay to consider the grounds for disapproving the Bitcoin ETF proposal. Why 21 May 2019? Because 90 days is the maximum amount of time it could ask for, and 21 May 2019 is 90 days from 20 February 2019, which was the date that the proposal got published in the Federal Register.  

Well, yesterday (i.e. just one day before the expiry of the 90-day deadline), the SEC decided to delay making a decision, and this time it had to provide "notice of the grounds for disapproval under consideration" (i.e. explain why it thinks that it might deny the proposal).

Here are a few of the SEC's concerns, and it is inviting the ETF's sponsor, i.e. BZX, and other interested parties to provide written comments (in either electronic or paper form):

  • Has BZX "entered into a surveillance-sharing agreement with a regulated market of significant size related to bitcoin?"
  • What is the relationship between the Bitcoin futures market and the Bitcoin spot market?
  • The proposed Bitcoin ETF uses "a non-public, proprietary index to value holdings based on OTC activity", but is this really "an appropriate means to calculate the NAV of an exchange-traded product"?
  • BZX has said in its proposal that it "has entered into a comprehensive surveillance sharing agreement with the Gemini Exchange and is working to establish similar agreements with other bitcoin venues." But is the Gemini digital asset exchange "a regulated market of significant size"?

Any arguments regarding whether the proposal should be approved or disapproved need to be submitted within 21 days of publication in the Federal Register of yesterday's order (Release No. 34-85896; File No. SR-CboeBZX-2019-004), and anyone who wants to "file a rebuttal to any other person’s submission" must do so no later than within 35 days of the date of publication in the Federal Register.

The following tweets were sent out on May 19, i.e. the day before the SEC made this latest announcement, by Crypto Twitter's favorite U.S. attorney, Jake Chervinsky:

According to Chervinsky, "VanEck's new deadline is August 19," and the "SEC can & likely will delay one more time for a final deadline of October 18."

This is how Gabor Gurbacs, Director of Digital Assets Strategy at VanEck/MVIS, expressed his personal thoughts on the SEC's ultra cautious attitude towards Bitcoin ETFs:

The SEC choosing to delay making a decision on the VanEck Bitcoin ETF proposal did not come as a surprise to the crypto markets, which reacted very calmly (Bitcoin's price only went down slightly), and in fact, at press time (11:00 UTC on May 21), according to data from CryptoCompare, Bitcoin is trading at $7,945, up 0.33% in the past 24-hour period:

BTC - 24 Hour CC Chart - 21 May 2019.png