5 best crypto alternatives to Robinhood for 2021 • Benzinga
Want to jump straight to the answer? The best alternatives to Robinhood are Coinbase and Voyager!
For new investors, Robinhood is a great place to start. Its simple user interface, low fees and mobile app make it easy for investors to manage their portfolios. While Robinhood is a great option for investing in stocks, most crypto investors will agree that there are better alternatives for investing in crypto.
Without a functioning cryptocurrency wallet, investors who use Robinhood for crypto are unable to send or receive funds on the platform. Additionally, there is a lack of variety in cryptocurrencies on the platform, which significantly limits your investment options.
Check out the best alternatives to Robinhood Crypto to find a dedicated cryptocurrency exchange to better meet your needs.
What is a cryptocurrency exchange?
Cryptocurrency exchanges work the same way as exchanges. Investors submit buy and sell orders, which create the exchange’s order books. The market price is the highest buy order or the lowest sell order, depending on whether you are buying or selling crypto.
Most dedicated cryptocurrency exchanges, like Coinbase and Gemini, have dedicated cryptocurrency wallets to store your crypto. Cryptocurrency wallets are an essential part of crypto exchanges as they allow you to send and receive digital assets on the platform.
Depending on the exchange you use, your investment options may differ. Most cryptocurrency exchanges allow investors to buy and sell cryptocurrency using market orders and limit orders, and some even allow you to trade altcoins for other cryptocurrencies. For example, Binance allows investors to trade altcoin-bitcoin pairs, allowing traders to track the performance of their investment against that of Bitcoin.
What makes Robinhood unique?
Robinhood is arguably the most unique cryptocurrency exchange, as its primary focus is stocks. For this reason, your crypto options on the platform are quite limited. Some key features that attract investors to Robinhood are the ability to buy stocks and crypto in one place as well as free transaction fees.
Another selling point of Robinhood Crypto is its user interface. Those who already use Robinhood for stocks are familiar with the platform’s user interface, which makes the learning curve for crypto investing close to zero.
Why Robinhood Crypto Might Not Be Right For You
While Robinhood is a great place to start investing in cryptocurrency, it’s not ideal for all crypto investors. As previously reported, Robinhood has yet to develop a cryptocurrency wallet on its platform.
Not only does this limit the way you fund your account, it also prevents you from interacting with Decentralized Finance (DeFi) programs. Cryptocurrency investors use DeFi programs like Aave, Uniswap, and Compound to earn interest on your crypto holdings, thereby increasing your return on investment.
Common complaint: lack of Altcoins
Another common complaint about Robinhood is its lack of altcoins. If you choose to invest in crypto on Robinhood, you will not be able to buy innovative altcoins involved in DeFi. Instead, you’ll be limited to “dinosaur cryptos” that have been around for a long time but are generally considered obsolete.
Some of these dinosaur cryptos offered by Robinhood are Dogecoin (D), Litecoin (Ł), Ethereum Classic (ETC), Bitcoin Cash (BCH) and Bitcoin SV (BSV). Besides these outdated projects, the platform also allows you to buy Ethereum (ETH) and Bitcoin (BTC).
What to look for in a cryptocurrency exchange
There are several factors to consider when choosing a cryptocurrency exchange. Among these factors, safety should be one of your main concerns. Large US-based exchanges are generally the safest way to buy crypto, making Coinbase, Gemini, and Robinhood very secure options.
Besides security, you should consider the characteristics of the exchange before choosing an exchange. Some exchanges allow leverage trading, while others allow you to convert cryptocurrencies for free, making it easier to manage your portfolio.
Another key factor to consider is the altcoins supported by the exchange. While some exchanges only offer a few coins, others like Binance, Gemini, and eToro have dozens of options to choose from. If you want to buy a particular cryptocurrency, make sure it’s supported by the crypto exchange you’re creating an account with.
Best Alternatives to Robinhood Crypto
Are you looking for a Robinhood alternative to invest in crypto? Benzinga has put together the best alternatives to Robinhood Crypto, so that you can find the best exchange for your personal needs. Depending on what you are looking to accomplish with crypto investing, it may be a good idea to use multiple exchanges. Either way, make sure to secure your account with 2-factor authentication to avoid any potential breach of your account security.
Coinbase is among the most secure cryptocurrency exchanges on the market. Not only is it a publicly traded company, but the exchange secures 98% of users’ funds in a cold warehouse, which means it is not accessible through the internet. This way, online hackers will not be able to steal the majority of funds even if they have successfully breached Coinbase’s industry-grade security.
Additionally, Coinbase Earn gives you free cryptocurrency to learn more about the technology behind crypto. Just watch a short video and answer a few questions and Coinbase will deposit the cryptocurrency into your exchange account.
While Webull has a similar offering to Robinhood, the platform does have a few more perks that may be worth it. The exchange has a few additional altcoins that are not on Robinhood, such as Stellar Lumens (XLM) and Zecash (ZEC).
Additionally, Webull offers customizable charts, which can come in handy if you are a day trader. It also supports 2-factor authentication, so rest assured that your funds will be safe. Along with cryptocurrency, Webull offers a range of stocks to invest in, similar to Robinhood.
Gemini is a dedicated cryptocurrency exchange based in the United States. Not only can you invest in cryptocurrency on Gemini, but the platform also allows investors to stake their cryptocurrency investments to earn interest on their holdings. If you are planning to buy crypto for the long term, you should consider using a platform that allows you to earn interest on your crypto.
Additionally, Gemini offers a lot more altcoins than hybrid cryptocurrency exchanges like Robinhood and Webull. Not only does Gemini support over 30 cryptocurrencies, it also offers 19 crypto-crypto pairs, so you can trade cryptos against major players like Bitcoin.
Considering the plethora of features on Voyager, it’s a great choice for a variety of cryptocurrency investors. The exchange supports over 50 different cryptocurrencies, so you’ll be less limited in what you invest in than other exchanges.
Additionally, Voyager supports cryptocurrency staking on its mobile app and website. Users can choose to stake their investments on Voyager to receive up to 10% annual interest. If you are passionate about crypto, then staking is a no-brainer.
Binance is the world’s largest cryptocurrency exchange, but its primary focus is outside the United States due to strict regulations by the Securities and Exchange Commission (SEC). The non-US website hosts a lot of features, including staking, leveraged trading, and small-cap altcoins. However, most of the US investors use Binance.us, which has limited functionality.
Either way, Binance is the best place to trade altcoins. It has low trading fees and the platform supports over 50 altcoins. Additionally, the Binance mobile app is convenient for investors who want to trade crypto on a day-to-day basis. If you are looking to find your way into mid-cost crypto, Binance gives you the option to set daily, weekly, or monthly recurring purchases.
Is switching exchange worth it?
In many cases, it’s worth switching exchanges. However, if you only want to invest in Bitcoin and Ethereum, then Robinhood is a good all-in-one choice to do so. That being said, using Robinhood for cryptocurrency will significantly limit the potential of your investment. If you decide to change the exchange, you will be able to earn passive income through DeFi interest rates. Additionally, you will have a lot more altcoins to choose from on other exchanges.
Benzinga has developed a specific methodology for classifying cryptocurrency exchanges and tools. We prioritized platforms based on offers, prices and promotions, customer service, mobile app, user experience and benefits, and security. To see a full breakdown of our methodology, please visit our Cryptocurrency Methodology page.
Gemini creates crypto products to help you buy, sell, and store your bitcoin and cryptocurrency. You can buy bitcoin and crypto instantly and access all the tools you need to understand the crypto market and start investing, all through a clean and attractive interface. Gemini Crypto Platform offers great account management options. You can manage your account at a glance, view 24 hour changes and percentage changes to your account balance. Start now with Gemini.