For a private FinTech company that’s known to be the second most valuable company in its league, Robinhood is shocking the crypto space by risking earning little to no profit for offering no-fee trading.
After it launched crypto trading back in February this year, the company experienced an influx of new customers daily, often reaching more than 200,000 new customers a day.
Robinhood is practically treating these users to free crypto trading.
According to Robinhood’s co-CEO Vlad Tenev, they intend to operate their crypto trading as a “breakeven business”:
“We don’t intend to make very much money on it all for the foreseeable future.”
Tenev and his co-CEO Baiju Bhatt don’t really seem to care about the profits. They see cryptocurrency as an entry point for “newbies” in the trading world.
According to Tenev:
“The thinking behind that is what we’re really doing is building an ecosystem. Right now the products are investing products, so crypto slots in very nicely alongside the 10,000 plus other instruments that people can trade.”
For the company, their stock business is what really brings in the money. They lend shares out to short-sellers with fees, collect interest on any cash deposits, and even have a subscription service offering margin trading and other advanced functions.