Why Cant I Purchase Crypto On Robinhood

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For proof of investors’ growing interest in cryptocurrency, look no further than the financial apps already on your phone.

Digital payment giants PayPal, Venmo, and Cash App — along with mobile stock-trading platform Robinhood — are making it easier to invest in cryptocurrency than always before, with options to buy and trade coins inside their apps.

Only even if you lot feel more secure buying crypto with an app y’all might already use over a cryptocurrency exchange you’ve never heard of, the chance and volatility remains. Some of these mainstream players are also far more limiting in what they offer than traditional cryptocurrency trading platforms.

Here’s what you need to know almost buying crypto outside of cryptocurrency exchanges, and how to decide what makes the most sense for you.

Mainstreaming Cryptocurrency

Apps like PayPal and Venmo brand attainable entry points for crypto novices to dip their toes in the h2o. And, depending on how yous already utilize the apps, their offerings may be well-suited to your knowledge base of operations and interests.

For example, someone with zero knowledge but a few dollars to spare might find an exchange like Gemini confusing, but may be willing to purchase some Bitcoin through their Venmo account just to experiment equally they start to learn.

In general, experts say these apps can be not bad places to outset if you’ve decided it makes sense to invest in cryptocurrency, only don’t quite empathise all the dissimilar types of crypto, how an exchange works, or different storage options.

Whereas using a more traditional exchange might seem complicated, yous can just log into your account and buy what you want without having to worry about it, says Tyrone Ross, financial advisor and CEO of Onramp Invest, a crypto investment platform for financial advisors. “For newbies, I really suggest going to PayPal, Venmo, Cash App types of places, because they make information technology every bit unproblematic as possible.”

Fifty-fifty for investing pros, cryptocurrency can exist daunting. Personal finance expert Suze Orman recently told NextAdvisor nigh her offset effort. “Truthfully, I didn’t really know how to buy a large amount of Bitcoin and crypto,” she says. “Coinbase was aggravating me, I had bought a little fleck of it and so I sold some, but it was only besides complicated for me — even though information technology’south not complicated at all.”

She instead decided to invest indirectly, through stock in companies with crypto holdings, but she’s recently come back around to ownership crypto, this time on PayPal. “I ain now $five,000 in Bitcoin, and I exercise information technology through PayPal because it was just easy to do it,” she says.

How These Apps Differ From Crypto Exchanges

There are some important distinctions between using a fintech app to buy crypto versus a traditional exchange like Kraken or Crypto.com, largely involving ways you tin (or can’t) transact, and limitations on where y’all tin keep the crypto you lot buy.

Payment Platforms and Cryptocurrency

PayPal, Venmo (which is owned by PayPal), and Greenbacks App each operate a bit differently when it comes to crypto. Each of these apps offer different coins, and various fee schedules for buying and selling crypto. While Cash App does allow y’all to move your coins off the platform or move Bitcoin you lot concord elsewhere into your account, that’s not an option on PayPal or Venmo.

Payments App Types of Crypto Tin can You Withdraw? Fees?
PayPal Bitcoin, Ethereum, Litecoin, Bitcoin Cash No Yes
Venmo Bitcoin, Ethereum, Litecoin, Bitcoin Cash No Yeah
Cash App Bitcoin Yeah Aye

Robinhood Crypto

Robinhood offers a few types of cryptocurrencies (like Bitcoin, Ethereum, Bitcoin Cash, and even Dogecoin), which you can purchase and sell inside the app. Like its other investment options, a big perk of trading crypto on Robinhood is a lack of fees, which can widely vary amongst traditional exchanges.

Its accessibility as an investment platform is a big draw for many — whether they’re investing in crypto or the stock market — only information technology’s likewise what tin can make Robinhood riskier. It’southward been criticized for making trading also game-like and encouraging volatility through active trading, rather than long-term investment growth. Just like stock trades, approaching an already-speculative asset similar crypto with that mindset can make your investment even more than of a chance.

When it comes to crypto specifically, Robinhood recently announced information technology’s creating its own digital wallet for its crypto users. Previously on Robinhood, y’all couldn’t move your individual primal (the encrypted code that grants admission to your cryptocurrency) into your own wallet, or trade on an commutation like Coinbase. For believers in the crypto mantra “not your keys, not your coins,” that was a major drawback.

Still, not many details have been released about Robinhood’southward wallet, including fees, specifics effectually security and private and public keys, or any other features.

Whether you’re considering Robinhood or an app similar Venmo, remember that cryptocurrency is highly volatile. Fifty-fifty if yous’re simply putting in a few dollars to experiment, information technology’s smart to approach your investment with a long-term mindset — once you’re certain information technology won’t stand up in the way of your other fiscal goals — and be prepared to buy and agree over fourth dimension rather than participating in active trading.

Should You Choose These Over Traditional Exchanges?

Fifty-fifty the more popular cryptocurrency exchanges — like Coinbase and Gemini — may not exist platforms you lot’ve always heard of or trust with your financial information. And others are simply difficult to navigate, making the process of buying crypto even more than complicated for beginners.

Because there’s little federal regulation, it tin can be difficult to evaluate how secure or reputable a traditional crypto trading platform is. While apps similar Venmo or PayPal can’t protect your crypto holdings under FDIC insurance similar they can your cash, familiarity with these apps tin make the experience a bit simpler — maybe you already have your fiscal information linked, or the user interface is just more than familiar.

“How much transaction volume and transparency into their financials and business operations I really call up is the stuff you want to expect at,” says Douglas Boneparth, a financial advisor and president of Bone Fide Wealth in New York. “Are most people going to practice that? No, they’re going to observe the easiest app to download and link their bank account, and make it like shooting fish in a barrel to buy crypto once more. That’southward kind of the appeal of mobile apps [like PayPal and Cash App] and the similar.”

But many experts view the apps equally a jumping off point, not necessarily somewhere they’d recommend you keep your coins long-term.

“It’s going to be a great fashion to go people introduced to the crypto space,” says Spencer Montgomery, founder of Uinta Crypto Consulting, a program for new investors to larn well-nigh crypto. But as they become more than involved, “I expect that a lot of them, as they see success with it, will want to larn more than, and as they larn more they’ll realize that there are meliorate means to be buying Bitcoin and motion off of that.”

At some point, you may decide you practice want control over your keys and your coins afterwards all — and that’s why a more than traditional commutation may be a better pick. For example, if an initial investment after saw a meaning increase in value, yous might want to move your crypto offline for greater security from cyber threats — something that wouldn’t be possible on Venmo or PayPal.

If all your crypto is on a platform that doesn’t allow offline storage, your just pick is to continue it and put more than money in on another exchange — leaving your avails in multiple places —  or sell what you accept at the current toll earlier ownership elsewhere.

If y’all choose an substitution like Coinbase from the showtime, which offers the option to proceed your coins on the platform or trade and store them on your own, it can exist much simpler to ease into those activities if y’all desire to in the future.

It all comes down to the learning curve. “Exposure leads to expansion,” Ross says. “As you’re exposed to the space and you learn more than and you go into the crypto economy, you’re going to realize, oh wait, there are all these other things I can do.”

Whatever selection yous cull, just remember that cryptocurrency is yet a highly speculative asset. Information technology can be a worthwhile way to diversify your portfolio, even if you lot’re but experimenting, but you should merely invest what you’re prepared to lose.

No matter whether yous put a few dollars into Bitcoin through Venmo, or you’re prepared to purchase on an exchange and hold your coins in an offline wallet, only do and so after you lot have your other financial priorities in gild, like an emergency fund and traditional retirement plan.

Source: https://time.com/nextadvisor/investing/cryptocurrency/should-you-buy-crypto-on-robinhood-venmo-paypal/

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