How to Sell Crypto on Robinhood
When it comes to crypto, new investors are jumping on the bandwagon every day.
There is always something new going on in the space. If you're looking to get into the crypto game, Robinhood is a great platform to use.
It's already a popular app in traditional finance, so it's a great place to house both stocks and crypto and trade them for profit. Buying and selling crypto on the app is easier than you may think.
If you aren't interested in DeFi or don't like the idea of centralized exchanges owning your keys, then Robinhood could be your best option.
What Is Robinhood?
The Robinhood app is free for users to invest in stocks, ETFs, options, and crypto without paying commission fees. It also offers a premium version for a monthly fee that gives users access to more advanced features, such as research and analysis tools.
The app was created by two Stanford students who were frustrated with the high commission fees charged by traditional brokerages. Since its launch in 2014, Robinhood has been one of the fastest-growing brokerages in the US, with over 22 million users as of 2022.
In 2018, the company launched a cryptocurrency trading platform and has since expanded its offerings to include checking and savings accounts. Robinhood is best known for its simple and user-friendly interface, which makes it a popular choice for first-time investors.
Market Orders VS. Limit Orders
Before we begin with the process of buying and selling crypto on Robinhood, we should go over the types of orders allowed on the platform. You have two main options: limit orders and market orders.
You can set the order type by clicking on the three dots in the upper right corner of the buy screen.
A market order is a standard type of buy or sell action for securities. You click on what you want, click buy, and you buy it. A limit order is a bit different. Here, you want to buy or sell at a specific price.
If BTC is trading at $20,652, you can place a limit order to buy 2 BTC at a target price, like $20,500 or even $20,000. Market orders are typically executed immediately, while limit orders may take some time to execute.
Market orders ensure that investors get the best possible price for their securities. However, they also carry the risk of execution at a worse-than-expected price if the market moves against the investor.
Limit orders provide certainty about the price at which an investor's securities will be bought or sold. However, there is no guarantee that the limit order will be executed, as it may take some time to find a counterparty willing to trade at that price.
Ultimately, using a market or a limit order depends on the individual investor's circumstances and objectives.
For example, an investor who needs to sell their securities immediately will likely prefer a market order. An investor who is less concerned about an instant sale and more concerned about getting their securities sold at a specific price may choose a limit order.
How to Buy Crypto on Robinhood
The process is pretty simple if you're looking to buy crypto on Robinhood. Go to the app, select 'Trade' from the bottom menu, and tap on 'Crypto.' From there, you can choose which token you want to buy.
Another option is to type the ticker directly into the search bar. For example, you can type Bitcoin or BTC into the search bar to find that particular crypto. You'll see a crypto button under the header “Trending Lists” on the main screen. Clicking on that will take you to a page that shows everything you can buy and sell on the platform.
You can also set up a recurring buy, automatically purchasing a set amount of crypto at set intervals. This is an excellent way to dollar-cost average your way into a position.
When you go to buy crypto, the first option is to decide how you want to purchase the tokens. In the case of Bitcoin, you can buy X dollars worth, as shown in the image above. You can also change it to BTC itself, which comes in handy if you want to buy a specific amount of Bitcoin, such as .5 or 1.
Once the screen shows the order you want, click on “Review Order” to go through the rest of the buying process. It should only take a few seconds.
How to Sell Crypto on Robinhood
If you want to sell crypto on Robinhood, the process is just as simple as buying. Just go to the page of the crypto you want to sell and perform the actions from the above section. Pick your order type, the number of tokens or USD equivalent you wish to sell, and then “Review Order”.
The funds should show up in your account immediately, and you can use them to buy other cryptos or invest in traditional stocks and ETFs.
Pattern Day Trading
Day trading is a strategy in which stock traders buy and sell shares throughout the day, taking advantage of small price movements in the market. In order to be classified as a day trader, an investor must execute four or more trades in a five-day period.
Day traders are subject to special rules requiring them to maintain a minimum account balance of $25,000. If they fall below this threshold, they are not allowed to trade for the rest of the five-day period. Day trading can be risky but can lead to quick profits.
The SEC, or securities exchange commission, regulates this kind of trading. Crypto, however, is not regulated by the SEC. So you can day trade as much as you want without worrying about your account being frozen.
However, it's also important to mention that Robinhood and its crypto platform are not the same company. You won't be able to use your crypto for collateral in an equities position, and there will be a grace period of a few business days after a sale before you can move funds from the crypto platform to the tradfi version.
There are also some differences in the fees charged. For example, while Robinhood doesn't charge any commissions for equity trades, it does charge a small fee for crypto trades. So if you're looking to day trade crypto, it's important to keep this in mind.
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The Bottom Line
Overall, Robinhood is a great platform for buying and selling crypto. It's simple to use and has a great mobile app. Just remember that there are some differences between the tradfi and crypto versions, so make sure you're familiar with them before you start trading.
Have you ever used Robinhood to buy or sell crypto? Let us know in the comments below.
Robinhood - robinhood.com
Statista - Robinhood users 2022