You’re losing $7.13 on Robinhood for every $1,000 crypto you trade.
Most of you should be familiar with Robinhood, the most popular zero-fee stock brokerage in the US. And they allowed their users to buy crypto as well, without paying any trading fees.
Free of charge. Sounds sexy, doesn’t it?
Well, you’re falling right into the trap when they talk about trading fees. There’s no such free stuff when it comes to trading fees if you look closely.
Is it REALLY free to buy crypto on Robinhood?
If you only look at the trading fees, then yes, it’s free.
But they actually eat tremendous shares of your crypto by the “spread”. Which means you always buy crypto at a higher price on Robinhood if you compare with other legit exchanges, let’s take Pionex as an example.
Here’s the screenshot of the ETH price on both platforms, which I took at the same time.
So it cost you $1735.63 to buy an ETH on Pionex, but it’s $1742.38 on Robinhood. And the worst part of Robinhood is that when you are trying to sell your ETH, see the price in the above image? You’re only able to sell at $1730.04.
So the price difference between buy and sell is called spread. That’s how Robinhood ripped you with their so-called 0 fee marketing.
Losing $7.13 for every $1,000 on Robinhood
Let’s do some math one how much Robinhood charges you for every $1,000 you trade on their platform.
Let’s say you want to buy $1,000 worth of ETH on Robinhood. And you’ll receive 0.5739 ETH with those $1,000. Right after that, if you want to sell those ETH. You’ll receive $992.87 back (0.5739 * $1,730.04). With this back and forth, your $1,000 is now $992.87.
What if we do it at Pionex? You’ll receive 0.5761 ETH with $1,000 investment. Because Pionex charges 0.1% trading fees, it costs you $1 to buy $1,000 worth of ETH and another $1 when you sell your ETH. That’s $2 in total.
Not to mention it’s just a mere $1,000. I know a lot of people trade tens of thousands of volumes every month. They’re going to be ripped by the spread for $713 for every $100,000!
So, choose wisely.
Stay away from Robinhood because of the hidden cost that they never told you.
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