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How to Buy Crypto with Robinhood

How to Buy Crypto with Robinhood

Learn how Robinhood's platform suits those looking to buy crypto and where it falls short.

Summary: Robinhood offers a platform for users to engage in cryptocurrency trading, providing a direct path to digital asset investment with options like Bitcoin and Ethereum. Unfortunately, this approach is limited in its offerings and charges extremely high fees compared to dedicated digital currency exchanges.

Kraken is a notable alternative for Robinhood enthusiasts keen on a broader crypto trading experience. With its stringent adherence to U.S. regulatory standards, including compliance with FinCEN regulations, it ensures a secure trading environment. It boasts a diverse selection of over 200 cryptocurrencies for trading and staking, catering to various investor preferences and strategies.

Top Crypto Platform for Robinhood
5.0 out of 5.0 by Datawallet
Kraken is the best suited cryptocurrency exchange for Robinhood customers as it provides free and fast USD deposits plus a wide range of over 200 digital assets.
Licenses
Registered with the U.S. Financial Crimes Enforcement Network (FinCEN).
Available Assets
200+ Cryptocurrencies to Trade and Stake (Spot and Margin markets).
Deposit Methods
ACH Transfer, FedWire, Plaid, Credit Card, Debit Card, Zelle and more.

Kraken is a regulated U.S. entity with FinCEN registration and a Special Purpose Depository Institution charter in Wyoming for digital asset-related services.

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Can I Buy Bitcoin with Robinhood?

Yes, Robinhood provides an avenue for buying and selling 18 digital assets, featuring popular options like Bitcoin, Ethereum, Solana, and Avalanche, along with various lesser-known altcoins. Unfortunately, the transaction spreads can go as high as 1.5%. Consequently, Robinhood is one of the pricier investment platforms in the country. This is why we recommend cryptocurrency exchanges in the United States to invest in the asset class.

How to Buy Crypto with Robinhood Alternative

Although Robinhood provides a direct route for trading cryptocurrencies, those seeking a wider range of digital assets might consider Kraken. This platform is recognized for its adherence to FinCEN guidelines and its capability to accept USD deposits. Kraken distinguishes itself with free and straightforward USD funding options, granting access to an extensive portfolio of over 200 cryptocurrencies at competitive rates.

For Robinhood users contemplating Kraken for a more diversified crypto investment, here’s a guided approach:

  1. Account Setup: Navigate to Kraken’s website to initiate a new account creation.
  2. Banking Integration: Associate your bank account for effortless USD deposits.
  3. Crypto Exploration: Delve into the vast selection of digital currencies available on Kraken.
  4. Investment Moves: Determine your investment scale, select your preferred crypto, and confirm your acquisition.
How to Buy Crypto with Robinhood Alternative

What are the Fees?

Trading on Robinhood incurs high trading fees, making it an expensive choice for many investors. Unlike some platforms that impose commissions, Robinhood differentiates itself by offering commission-free trades but extremely wide spreads of over 4%. This makes it significantly more costly than normal cryptocurrency exchanges.

For Robinhood users exploring broader crypto trading platforms, Kraken emerges as a viable option with its competitive pricing model. With maker fees starting as low as 0.16%, Kraken presents an affordable alternative to platforms like Coinbase, which may charge fees upwards of 2%. Kraken further enhances its appeal with free USD deposit methods, including ACH transfers, making it an attractive platform for American users looking to delve into the cryptocurrency market.

Is Robinhood Good for Crypto?

While Robinhood does offer a convenient, user-friendly platform for entering the crypto market, it may not be the optimal choice for US investors looking for comprehensive crypto exposure. The platform has relatively high spreads, reaching up to 4% per transaction, and supports a limited range of 18 digital assets. These constraints could make Robinhood less appealing compared to platforms with lower fees and a more extensive selection of cryptocurrencies.

Robinhood Crypto

Bottom Line

In summary, while Robinhood presents a user-friendly gateway for casual traders to enter the crypto world, the platform's limitations in terms of digital asset diversity and high transaction costs underscore the need for a more comprehensive solution for serious investors. Kraken emerges as a robust alternative, offering a vast array of over 200 cryptocurrencies coupled with a more favorable fee structure and strict regulatory adherence with the FinCEN.

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