On Thursday (11 October 2018), Robinhood, the Californian FinTech startup, founded in 2013, which launched a zero-commission crypto trading service ("Robinhood Crypto") in February, announced that the service had now become available become available in Ohio ("The Buckeye State").
The Robinhood mobile app lets U.S. customers (mostly millennials) trade cryptocurrencies, stocks, ETFs, and options commission-free (and with no minimum investment) all within one app.
When Robinhood Crypto first launched in February 2018, the only two cryptocurrencies supported that you could trade were Bitcoin (BTC) and Ether (ETH); also, the service was only available in four states. By 12 July 2018, as reported in the Robinhood blog, support for trading two more cryptocurrencies -- Litecoin (LT) and Bitcoin Cash (BCH) -- had been added, and the service had expanded to 17 States (AZ, CA, CO, FL, IN, MA, MI, MS, MO, MT, NJ, NM, PA, TX, UT, VA, and WI).
July 16th and August 6th saw Robinhood add trading support for Dogecoin (DOGE) and Ether Clssic (ETC) respectively. As for expansion of the service to other U.S. states, since July 31st, the service has become available to customers in 8 more states: Iowa (July 31st); Georgia (August 2nd); Alaska (September 25th); Oklahoma (September 27th); Rhode Island (October 2nd); Arkansas and Tennessee (October 5th); and Ohio (October 11th).
This means that the Robinhood Crypto service is now available in 25 states: Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Indiana, Iowa, Massachusetts, Michigan, Mississippi, Missouri, Montana, New Jersey, New Mexico, Ohio, Oklahoma, Pennsylvania, Rhode Island, Tennessee, Texas, Utah, Virginia, and Wisconsin.
Robinhood makes money in the following ways:
- Earning interest on funds held in customer accounts.
- Selling order flow to exchanges wanting additional liquidity.
- Selling subscriptions to "Robinhood Gold", which costs $10 - $200 per month, and allows margin trading.
"In the next couple of years, I think you'll see Robinhood looking like a full-service consumer finance company."
The news about Robinhood Crypto's expansion into Ohio comes just one day after we found that Robinhood now had six million customers (according to a Techcrunch report, "up from 4 million just 5 months ago"). Although this was an important milestone for Robinhood, the company made a much more important announcement that day: after a two-year engineering effort, it had managed to build its own clearing system from scratch. Robinhood says that this will result in several benefits for customers:
- elimination or loweing of "a bunch of small, frustrating fees" that were previously passed on to customers (e.g. bank reversals fees go down from $30 to $9);
- improved customer support since the new in-house clearing system gives them more account and trade information; and
- a better user experience and a faster pace of introduction of new features
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