Robinhood mobile trading app, the favorite among crypto users, closed it recent funding round where about $5.6 billion was attached. In the latest cryptocurrency news today, we see how the platform managed to create a multi-billion dollar business in less than seven years.
Robinhood built a zero-fee stock brokerage and trading app with a very inviting user interface and managed to build its empire. The company’s valuation increased after the latest $200 million funding round from its financial backers. The funding round could result in the company reaching a valuation as high as $10 billion.
The last year’s funding round brought the company a valuation of $5.6 billion. The stock trading app has an amazing track record of growing its user base and successfully managing to monetize its services.
According to Nasdaq’s reports, Robinhood Markets Inc. made a &billion revenue back in 2017 and the company is expected to make $47 billion annually by 2020. This is possibly the fastest growing broker of all time. In 2018, the investment app surpassed its rivals and doubled its user base to 4 million.
As the best cryptocurrency news sites explained, Robinhood mobile trading app has zero commission fees which are surprising how the company manages to make such crazy amounts of money. The profits, however, come from three main sources: selling orders to high-volume exchanges that are seeking more liquidity profits from interest rates earned by lending money and by the Robinhood Gold subscriptions that charge a $10 to $200 a month.
Selling orders to high-frequency exchanges is a tried practice that has proven to attract criticism for lack of transparency. Nevertheless, Robinhood is extremely popular with millennials. The zero-fee policy is a major selling point for this target group. The app’s friendly interface is also one of the reasons for its huge popularity.
There’s no doubt that the Robinhood mobile trading app selection of crypto investments is also very attractive to the millennials and daytraders. A survey shows that 43 percent of millennials trust crypto exchanges more than they do stock ones. The co-founder of Robinhood stated:
‘’Crypto has certainly added to our growth. In the next couple of years I think you’ll see Robinhood looking like a full-service consumer finance company.’’
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“…We tried to increase the volume but can’t do it through the dashboard and were told we needed to email compliance.’’The debacle brought BitPay under fire due to the massive criticism which frequently engulfs the exchange. The prolonged bureaucracy compounded by another scandal including transaction fees which have led to frequent calls for business to open the source alternative payment processor and the logic as explained on Twitter pointed out in the comments on Amazon Watch’s difficulties is because Bitcoin is a free and open payment system and there are third parties that verify the transactions arbitrarily in order for the cryptocurrency to serve its purpose:
“…You don’t need (BitPay) to reject your transactions when you can verify them yourselves for free.’’As noted in the latest cryptocurrency news, BitPay’s difficulties have had a long history since 2017 even when the executives opted to support the controversial SeGwit2x bitcoins scaling proposal which eventually led for the crypto wallet Trezor to ditch the company. Amazon watch even stated that it would look into using BTCPay an alternative open-source option which could copy that similar one of the travel agent CheapAir from 2018. The backlash over the previous actions of the exchange led to many customers closing their accounts and invoices.
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Kraken Pro Trader Believes Crypto Trading Is The New Wall Street
"Wall Street ain't what it used to be. The first 15 years I was on Wall Street, it was fun. I was very fortunate, I started in the CDS market which feels a lot like crypto. Here you have a lot of financial innovation, a lot of trading...It feels very much like that, there's a lot of energy and enthusiasm about this progress and where it's going."Another example is the Morgan Stanley alum Marcus Swanepoel who told the Financial Times:
"Over the past two years we have seen evidence building that bitcoin is an uncorrelated asset class so it makes sense to add it to portfolios."The trend is growing towards more portfolio managers coming in including what Minier says is mavericks and savvy hedge funds entering the crypto space. The digital currency investment company Greyscale investments also saw its assets under management balloon to $2.5 billion and most of which originated from big investors including hotshot hedge funds. The Kraken Pro trader stated:
"I think it's going to be one of those things in a blink that everybody is going to start chasing it.’’With the upcoming launch of the Bakkt bitcoin futures exchange, more traders could begin to feel the way that Minier does and Kraken has been experiencing an uptick with the institutional demand for crypto but he admitted it was too slow. In the meantime, the rival crypto exchange Coinbase based in San Francisco revealed that hundreds of millions of dollars in institutional capital is coming straight off the sidelines into cryptocurrencies a week as we noted previously in the latest cryptocurrency news. They sure can’t find these types of returns in any other asset class with rock-bottom interest rates and the equities mimicking bond yields. Bitcoin in the meantime has generated high returns of more than 150 percent year to date.
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