Analyzing The Robinhood Crypto Wallet

When it comes to exchanging cryptocurrency with zero network costs, the Robinhood Wallet app is your entrance to the web3 cosmos and a self-custody wallet. Rising in popularity due to the platform being free, how safe really is the Robinhood crypto wallet?

Robinhood, The Investing Platform

Founded in March 2015, Robinhood is a California-based American financial services firm that allows users to trade stocks, ETFs, and cryptocurrencies without paying any trading fees. Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC) are two organizations that Robinhood complies with as a member. 

Interest in customer deposits and selling order data to high-frequency traders. And margin lending makes up the bulk of the company’s revenue stream. 

Robinhood has 22.8 million funded accounts and 15.9 million active users as of March 2022. Approximately 2.2 million customers accessed Robinhood’s cryptocurrency wallet when it was released in April 2022.

Order Flow

As of October 2018, according to a Bloomberg News investigation, about half of Robinhood’s income came from paid order placements. The corporation subsequently verified the news on its website. According to Robinhood’s regulatory filings, the Wall Street Journal discovered that the company “appears to be accepting more cash for orders than the competitor.” By a factor of up to 60 to 1.

The Financial Industry Regulatory Authority fined Robinhood $1.25 million in December 2019. It failed to provide its customers with the most significant available assurances regarding trade prices. 

Between October 2016 and November 2017, Robinhood’s order flow transactions went to companies that paid to receive them. The company did not investigate whether or not employing other market makers would have resulted in better pricing.

In December of that year, a class action suit was filed against Robinhood for fraud, including the concealment of material facts about the company’s reliance on payment for order flow for a significant amount of its income.

Foray Into Crypto

Robinhood revealed trading cryptocurrencies without fees on its list on January 25th, 2018. By the conclusion of the first day, the waiting list had grown to include more than 1,250,000 names. 

Since February 2018. Robinhood customers in Massachusetts, California, Montana, and Missouri have been able to trade cryptocurrencies such as Bitcoin and Ethereum. 

In May 2018, Robinhood began offering its trading platform in the states of Wisconsin and New Mexico. The only states that didn’t allow bitcoin trading by 2021 were Hawaii and Nevada.

Bitcoin, Ethereum, Dogecoin, and Litecoin were subsequently included as tradable assets on Robinhood.

Robinhood developed a waiting list for its cryptocurrency wallets and began offering automatic recurring deposits in September 2021. Robinhood CEO Vladamir Tenev stated, “We feel incredibly comfortable with the coins we’re listed today. Our goal is to have the same level of happiness with more coins as before. “

Robinhood said in April 2022 that it had given cryptocurrency wallets to every one of its 2 million customers. The company also announced Lightning Network integration for April 2022.

How Does The Robinhood Crypto Wallet Work?

Robinhood promises their no-network-cost wallet will enable customers to earn interest on their assets. The new software will provide similar functionality to Robinhood’s current app. Users will manage their wallet keys and access decentralized exchanges and cryptocurrency services. Using the app, investors may connect to NFT marketplaces.

The lack of network expenses is noteworthy. Solana, Avalanche, and Ethereum charge fees for sending or receiving bitcoin. Fees are modest or high depending on the network’s trading volume. Ethereum’s gas prices are among the highest in the industry for confirming ETH transactions.

Therefore, Robinhood covering these expenses may benefit investors. The company hasn’t said which cryptocurrencies the wallet would support.

Robinhood investors may now buy cryptocurrency, but the company is a custodian. The non-custodial wallet returns authority to investors. A digital wallet’s private key is a 64-digit number that is irreplaceable. It is a hot wallet, a mobile wallet that connects to the internet. Cold wallets are physical storage devices that users can only access with a computer and PIN.

“Not Your Keys, Not Your Coins” is one of the most vital tips in the cryptocurrency space, and you should not be leaving any more value than you are willing to gamble with on “hot wallets” or exchange wallets like the Robinhood crypto wallet.

Robinhood co-founder and CEO Vlad Tenev said the company’s new web3 wallet would let customers “keep their keys and enjoy the open financial system’s advantages.”

Is The Robinwood Crypto Wallet Safe?

The Robinhood crypto wallet & platform should be secure if you take the usual precautions with your password, use MFA and private keys, and avoid swapping your sim card. The user’s and Robinhood’s shared obligation is to keep their currency secure.

Users should take all necessary precautions to safeguard their cryptocurrency, even if the platform offers a secure and reliable environment to store it. However, owing to their assured security, Robinhood crypto exchanges are a trusted destination for buying, selling, and receiving cryptocurrency. When users are sent one of the accepted currencies to their app, the platform does not impose any fees.

Supported cryptocurrency networks compensate them for the trading rights they give on their platform by paying them a royalty. The SEC regulates Robinhood’s stock and cryptocurrency trading and examines its transaction-based revenue model.

Pros & Cons of The Robinhood Crypto Wallet


  • Due to its position as a discount broker, Robinhood has some of the lowest costs in the industry. Options trades are covered since there’s no contract fee.
  • Robinhood’s UI is essential. Some fear that the market would become oversaturated by allowing novices to employ complex trading strategies like options trading. If you’re starting, the basic layout is excellent.
  • Robinhood’s free bitcoin trading stands out among stock brokerages. Robinhood’s crypto offerings excel compared to pure-play crypto brokerages.
  • Robinhood gives access to IPOs to its users. Only banks could do this before.


  • Robinhood only offers taxable brokerage accounts, therefore no retirement savings. Long-term parking or retirement savings won’t afford the tax benefits of a conventional or Roth IRA. Most investors should fund a retirement account first.
  • Diversifying your portfolio may not be easy without bond and mutual fund markets.
  • Robinhood’s customer service remains subpar to rival brokerages despite recent improvements.
  • Robinhood has been accused of misleading consumers and penalized for frequent outages and trading limitations amid market volatility. We’ll discuss these costs and customer service problems below.

How To Get Your Crypto Off Robinhood

Users must first sign up for Robinhood Crypto to make withdrawals of cryptocurrencies through Robinhood. It involves identity verification and the use of two-factor authentication. Then, on the cryptocurrency’s details page, click Transfer, enter the amount you want to send, paste or write in the address of the wallet you wish to send to, and click Review and Submit.

To sign up for Robinhood and earn a FREE random stock, use this link!

If you enjoyed this article, you may also like the following articles. 

Is Binance Safe?DeFi Hacks Total Over 1B or Coinbase Cryptocurrency Exchange.

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