Apps like Robinhood and Square Give Crypto Marketplace Room to Grow
According to English folklore, Robin Hood was a skilled archer, swordsman and heroic outlaw who stole from the rich to give to the poor.
In modern times, Robinhood is also the name of a smartphone app that boasts zero-commission stock trading for its 3 million users.
Since Robinhood’s target demographic is smartphone-wielding millennials, it comes as no surprise that it recently rolled out a no-fee cryptocurrency trading platform. This would permit trading of bitcoin and Ethereum at no cost.
When sign-ups for the crypto platform opened in January, more than 1 million users jumped on this opportunity.
Robinhood was founded five years ago, about the same time as Coinbase, the U.S.’s largest crypto platform. Robinhood’s base of 3 million users pales in comparison to Coinbase’s 13 million users.
However, that’s about to change.
The main problem with Coinbase is that it charges anywhere between 1.5% to 4% to enter the crypto markets. While this might not sound like a lot, if you are moving thousands of dollars in and out of the crypto markets, it can quickly eat away at your returns. If crypto trading promised investors lower fees, Coinbase isn’t doing its part to help.
Stiff competition has now arrived, as Robinhood launched its free crypto trading platform in California, Massachusetts, Missouri, Montana and New Hampshire. Since floating the service, Robinhood’s user base has grown by 25% to 4 million users.
This goes to show that there is no investment on the planet hotter than crypto right now. And investors are directly benefiting from more competition to Coinbase’s monopoly. Additionally, with more users moving into the space, these products should continue to improve and draw in more users.
The Market Is Underowned
I recently read something that gives me even more confidence that the crypto marketplace has room to grow.
According to a joint SurveyMonkey and Global Blockchain Business Council poll of more than 5,000 adults in January, nearly 60% of Americans have heard or read about bitcoin, but only 5% of the respondents actually own any.
With all the financial headlines about bitcoin and the CNBC segments, you would believe more than 5% of adults actually own it!
This meager bitcoin ownership number represents less than one-tenth of the 52% of adults in America who own stocks, and that’s not counting individuals who own stocks as part of a pension or retirement account. As an asset class, bitcoin is woefully underowned.
Part of this lack of ownership stems from the lack of understanding. Bitcoin is a 9-year-old technology that only burst onto the radar in the last few years. It’s an intangible asset whose value is based on complex cryptography, math and game theory. This is not your typical run-of-the-mill widget maker.
The science behind bitcoin is so new that it wasn’t even offered as a computer science college course just a few years ago. Few people own it, even fewer understand it.
However, this is rapidly changing.
With universities rushing to offer courses on bitcoin, and trading platforms like Robinhood and Square making it easier to access the markets, that 5% ownership number is set to skyrocket. And that means the price of bitcoin might resemble another English folklore, “Jack and the Beanstalk.”
Editor, Crypto Profit Trader
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