Cryptocurrency trading with Vlad Tenev

California-based financial services company Robinhood continues its winning streak as it accrues more than 4 million users. Vlad Tenev, Robinhood co-CEO, has stated that the company is “quite happy” that they have not made any money on crypto trading.
The cryptocurrency market provides plenty of alternatives to those wanting to engage in crypto trading. In line with this, the trading platform has been providing free digital currency trading and is happy that it is not making any profit from such trades.
No-fee trading
Robinhood caused a major stir in the cryptocurrency space when it offered during the start of the year free trading on its Bitcoin and Ethereum platforms. Yet, immediately after the company made crypto trading available, it had been inundated with 200,000 customers per day seeking to be part of its platform.
Now worth $5.6 billion, Robinhood also boasts 4 million accounts as it overtakes E*Trade, the previous fintech leader.
Cryptocurrency a Loss Leader
The reason behind Robinhood’s no-fee tactic is that it had been using cryptocurrency as a loss leader.
In an interview with Fortune, Tenev says:
“We don’t intend to make very much money on it at all for the foreseeable future. We intend to operate it as a breakeven business.”
The trading platform has utilized Bitcoin and Ethereum trading to encourage users to trade in more conventional assets, which have much higher profit margins than digital currency.
Tenev further states:
“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.”
This is a highly intelligent strategy considering the fact that the market cap for cryptocurrency is far lower than that of traditional assets. Robinhood’s ploy of using a hot and trendy commodity to entice new clients while introducing them to more profitable trading prospect is a sure recipe for success.
Aside from this, Robinhood also plans to venture into banking services. Tenev added:
“I think it doesn’t stop with just investing products. Customers are getting ripped off across the board in financial services.”
While crypto enthusiasts are already satisfied with Robinhood’s fee-free trading for Bitcoin and Ethereum, the company plans on adding more coins into its platform in the future but not before they make the necessary preparation.