Last updated on August 31st, 2022 at 03:40 pm
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With the rise of Bitcoin, Ethereum, Dogecoin, and other cryptocurrencies, you might be wondering if you own your actual crypto. After all, there are numerous crypto wallets and online crypto trading companies that let you transfer your crypt to other firms.
Robinhood recently shed light on this issue, making it much easier to invest wisely.
You don’t actually own Bitcoin or other cryptos on Robinhood as of now because you buy the right to buy and sell the coins, but not the actual product. You currently can’t transfer your cryptocurrency to another firm from Robinhood either.
You’d have to sell your crypto, transfer the money, and buy the crypto from a different brokerage firm if you don’t want to trade crypto with Robinhood anymore. Robinhood has said they are planning to add crypto wallets in the future but exactly what those will look like and whether you will actually own the crypto in them is not clear yet.
Throughout this article, I will go into more detail about whether or not you own the crypto you buy on Robinhood, how to cash out your crypto, and what the company is creating to make it easier for everyone to invest.
I will also talk about how Robinhood’s method of trading cryptocurrency affects day trading under the $25,000 limit.
Do You Own Crypto on Robinhood?
You don’t own crypto on Robinhood, but that doesn’t mean you can’t buy and sell it whenever you want to. What it means is that you can’t transfer your crypto bought on Robinhood to another brokerage firm or crypto service.
However, Robinhood is working on improvements to prevent this issue from occurring.
According to the Making of a Millionaire, Robinhood doesn’t charge commission rates to buy, sell, or own crypto. You don’t own it, but you also don’t rent it!
Can You Cash Out Crypto on Robinhood?
You can cash out crypto on Robinhood by selling your investments, but you can’t remove your crypto and put it into a cold wallet or move it to another firm.
Robinhood lets you buy crypto at any time of day during any day of the week since it’s not part of the primary stock market. You can cash out whenever you want to as well however you can’t transfer your crypto.
Here’s an in-depth explanation of how you can cash out your crypto on the app:
- Click on the cryptocurrency you want to sell in the app or on the website. Whether it’s Bitcoin or Dogecoin, all crypto trading works the same way on Robinhood. Check your coins and whether or not you’ve profited before selling or buying crypto.
- Choose the ‘Trade’ option, then select ‘Buy’ or ‘Sell.’ If you don’t have any crypto yet, the Trade menu will be labeled as Buy since there aren’t any coins to sell; Otherwise, click on the Trade option to sell your crypto if you want to cash out. Keep in mind you can’t sell your crypto and keep it in its original ‘coin’ form.
- Pick between selling or buying the cryptocurrency by the price or number of coins. Robinhood lets you buy some crypto and other stocks by the price or number of coins, but you usually can only buy Bitcoin (and other high-price cryptos) by the price. Low-cost coins, like Dogecoin, let you choose either option.
- Transfer your money to your bank account or another brokerage firm. If you want to buy other cryptos on Robinhood, you can use your account’s balance to buy it in the same method mentioned above. To transfer money to another account, you will have to withdraw the money to your bank account and then posit it into the new crypto exchange.
Note: Robinhood allows you to place limit orders to ensure your prices don’t go over a set limit. This tool is extremely valuable in the volatile crypto market.
What Is the Robinhood Crypto Wallet?
The Robinhood Crypto Wallet is a new feature that Robinhood is making that lets users buy, sell, and send crypto whenever they feel like it. You can send crypto to someone else’s account as payment, much like Paypal or Venmo does for traditional currency.
There are plans to expand the wallet to have its own app, too.
So, what does this new feature include?
- You can pay people in cryptocurrency, broadening your clients to a worldwide selection. According to TechCrunch, being able to pay people with crypto is undoubtedly the most important thing about Robinhood’s crypto wallet. You can send coins to friends, family members, clients, and anyone else with an account.
- Keep track of all of your crypto stats in one location rather than mixing them with your other stocks. Robinhood’s original setup had all of your crypto meshed with regular stock investments. This layout can get a bit cloudy and confusing, but the wallet separates everything to make it much more clear and concise.
- Unfortunately, you still can’t send crypto to other firms with this service yet. While you can send crypto within the app, Robinhood doesn’t let you send it to wallets outside of the brokerage firm. There might be changes down the road, but nothing has been discussed as of the moment this article was written.
Do You Own Day Trading Crypto on Robinhood?
You don’t own day trade crypto on Robinhood. That being said, you won’t be subject to day trading limitations, which means brokerage firms don’t require you to have a designated amount of money in the account.
In other words, feel free to day trade crypto on Robinhood with as little or as much money as you’d like to.
Keep these crypto day trading tips in mind since you don’t own the currency:
- You can’t day trade crypto from other services and firms.
- Your trades have to be sold to receive real currency.
- There are no limits to how much you need or how much you can buy and sell in a day when it comes to Robinhood’s crypto.
- You don’t own the crypto, you own the right to have it in your account.
Now that you know what you do and don’t own on Robinhood’s crypto exchange, you can decide if it’s the right company for you to invest with.
Robinhood’s crypto wallet will make it much smoother and easier to buy and sell crypto, but there are plenty of competitors that have more advanced crypto trading methods. Nevertheless, Robinhood’s user-friendly interface will likely keep crypto investors coming back for the foreseeable future.