Updated & Verified: June 21, 2021
Thinking about using Robinhood for trading crypto?
Robinhood first added crypto to their platform back in January of 2018 and in the first quarter of 2021, reported that 9.5 million users traded crypto using the Robinhood platform. (1)
Obviously a giant success and wildly popular platform for trading crypto – but how safe is it and can you day trade when using it?
We answer these and several other common questions about using Robinhood below.
Table of Contents
- 1) Can I Day Trade Crypto on Robinhood?
- 2) Robinhood Crypto Fees (How Much Does Robinhood Charge to Trade Crypto?)
- 3) Robinhood Crypto Buying Power (What is It and How Does it Work?)
- 4) Can I Buy Safemoon and Dogecoin on Robinhood?
- 5) Can I Withdraw Crypto from Robinhood?
- 6) Do I Own My Crypto on Robinhood?
- 7) Robinhood Crypto & Taxes: Does Robinhood Report crypto to the IRS?
- 8) Is Robinhood Crypto Safe & Insured?
- 9) What Happens to my Crypto if Robinhood Shuts Down or Hacked?
- 10) Does Robinhood Crypto Have a Stop Loss?
1) Can I Day Trade Crypto on Robinhood?
As a general rule of thumb, you can day trade with crypto on Robinhood without any of the normal limitations or rules for day trading stocks. In addition, unlike the stock market, the crypto market never closes so you can trade any time of day, any day of the week.
2) Robinhood Crypto Fees (How Much Does Robinhood Charge to Trade Crypto?)
Unlike other trading platforms, there are no fees for trading crypto with Robinhood. This making using Robinhood to trade crypto with appealing for people who may have a relatively small budget or don’t way to pay unnecessary fees.
3) Robinhood Crypto Buying Power (What is It and How Does it Work?)
Buying power for crypto works exactly the same in Robinhood as it does for stocks. In order for you to purchase crypto using Robinhood, you have to have enough buying power to do so. If you don’t have enough buying power in Robinhood to buy the crypto you are wanting to buy, you won’t be able to make the purchase.
4) Can I Buy Safemoon and Dogecoin on Robinhood?
At this time, you can’t buy Safemoon on Robinhood though there is a petition going around to try to get them to add it. You can, however, buy, sell and trade Dogecoin on Robinhood.
For those unware, Dogecoin is a cryptocurrency initially created as a joke payment system intended to make fun of cryptocurrency speculations and how ridiculous they often are. It has since become what many consider to be a viable investment. Safemoon, on the other hand, garnered huge popularity as a result of endorsements which probably means the coins value is over-inflated but time will only tell.
5) Can I Withdraw Crypto from Robinhood?
As a general rule of thumb, you can not directly withdraw or transfer crypto in Robinhood into another platform such as Coinbase. The only way to technically move your crypto away from Robinhood is to sell your crypto and then take the proceeds from those sales and use it to purchase new crypto in another platform.
6) Do I Own My Crypto on Robinhood?
Because you don’t have a crypto wallet with Robinhood and because you can’t transfer the crypto to another platform without first selling it, it could be argued that you don’t technically own the crypto that you purchased in Robinhood.
If at some point Robinhood changes these things and adds a wallet that you can store your crypto in, then this would probably change.
7) Robinhood Crypto & Taxes: Does Robinhood Report crypto to the IRS?
There are few certainties in life but paying taxes is one of them. This is no different when it comes to crypto on Robinhood. In the eyes of the IRS, crypto are just like stocks and you will be required to pay on any money you make from them.
8) Is Robinhood Crypto Safe & Insured?
Robinhood crypto is safe to an extent but not as safe as it would be if you were able to transfer it to a crypto wallet (especially one that is offline). In addition, Robinhood crypto is not protected by SIPC and is not a member of FINRA or SIPC – so it is not insured like other investments.
9) What Happens to my Crypto if Robinhood Shuts Down or Hacked?
If Robinhood shuts down or if your account gets hacked, you’ll likely lose your crypto investments. Since there currently is no way for you to transfer your crypto to a secure offline crypto wallet and since you can’t transfer your crypto outside of Robinhood without first selling it, you’re potentially at risk.
10) Does Robinhood Crypto Have a Stop Loss?
Robinhood crypto does not currently have a way to setup a stop loss so you’ll have to watch closely and sell off your investments yourself if a crypto investment doesn’t pan out as expected.
1. Christine Brown, Head of Robinhood Crypto Operations – https://robinhood.engineering/how-crypto-fits-into-robinhoods-mission-d93c9081a598