The highly popular stock market trading app Robinhood which charges zero fees while trading stocks will introduce an option to trade cryptocurrencies including Bitcoin and Ethereum in February 2018, according to an announcement made by the company.
The announcement for zero-fee cryptocurrency transactions comes as a welcome move to digital currency traders accustomed to paying high fees of around 4% per transaction to exchanges like Coinbase among others while conducting transactions everyday.
The app is also allowing its customers to track the prices of other digital currencies, including Litecoin and Ripple, but initially only Ethereum and Bitcoin trading would be allowed on the Robinhood platform.
The intention behind Robinhood charging zero fees for cryptocurrency trading, according to the company, is to become a “loss-leader”. The zero trading fees would also attract more users to its platform, which currently boasts a staggering 3 million users at the present.
According to Vlad Tenev, who is the co-founder of Robinhood, the company is planning to operate at break-even levels with zero profits. He said that the company has zero plans to profit from this venture in the near to long term future and claimed that this move of theirs is an attempt to increase their customer base as well as give their existing customers a positive and delightful experience on using their platform.
“We’re planning to operate this business on break even basics and we don’t plan to profit from it for the foreseeable future. The value of Robinhood Crypto is in growing our customer base and better serving our existing customers.”
The company is also offering easy to use analysis and transaction tools for their customers to better understand what happens behind the scenes as well as to keep a close watch on cryptocurrency valuations in real time.
The company concluded its announcement by saying that they believe that cryptocurrencies have the potential to reorganize the way traditional money works from the grassroot levels. They believe that these digital currencies would transfer power back to the people from powerful financial institutions and would change the status quo.
The move by Robinhood would increase competition among cryptocurrency exchanges and would break the cycle of high transaction fees charged by these companies in order to cash in on the cryptocurrency boom. As they say, more competition brings better opportunities for end customers.