I signed up to Robinhood early this month mainly to invest a little bit of money into cryptos.
Robinhood is a stock brokerage that has really taken off as they let you buy stocks with zero fees, compared to other brokerages such as Charles Schwab that charge $4-5 per trade. Robinhood makes money from interests on unused cash in their users' acocunts.
What really caught my attention was when they announced "Robinhood Crypto" earlier this year to allow users to buy and sell cryptocurrencies with no commissions.
I've thought about buying cryptocurrencies last year, but the only convenient option at the time was Coinbase, where I've actually signed up but was unable to use it as they require ID verification which never went through for me. Because of the flood of new users last year due to all the hype, their verification system also went down many times and at some point I just gave up. Looking back, it was actually a good thing Coinbase didn't work for me as the prices were much higher then for pretty much all the major cryptos.
Robinhood rolled out their crypto program on a state-by-state basis, probably due to regulations. When I found out it was finally available in my state, I signed up shortly. It also feels like it may be a good time to get into it now that the prices have gone down significantly.
Signing up is very simple, just create an account and download the app, link a bank account, transfer some money from your bank into Robinhood, and start trading right away. If you're buying cryptos, they require you to use the mobile app as you'll need to take a picture of your state-issued ID, such as a driver's license, and upload it into their system to verify you're a resident of a state where it's currently available.
The address verification actually didn't get triggered right away, I was able to buy a small amount of cryptos before the notification came up requiring you to verify before you can buy more. It also took a few tries before the verification went through (make sure you take a good picture before submitting it into their system). The other cool thing I like about Robinhood is they let you use some of the money before the bank transfer even completed. So say you scheduled a transfer from your bank account for $1,000 which could take 3 days to complete, Robinhood will actually let you use up say $500 of that to start trading right away. I think the amount could vary, for my last bank transfer they made the full amount already available for trading before the transaction was completed.
Their app uses very minimal UI and very easy to use. Though I prefer to use the web version for security reasons and also so I don't get anxious and check prices every 10 minutes on my phone. I've actually already uninstalled the app on my phone. Once you've purchased your first cryptos, you actually don't need the mobile app anymore, you can just trade on their website.
I really think it's good to have a small amount of your assets in cryptos, but certainly don't put money you can't afford to lose and make you cry. Lots of sad stories out there on Reddit where people risked their entire life savings and even took out loans to buy cryptos last year at their highest. It's very risky and it's really a gamble, but I do feel it's a good idea to own a little in your portfolio as a diversification strategy. I can't think of any other easily-accessible asset class out there that has the potential to give a 100x-1000x return in a fairly short amount of time. It's very high risk but also potentially very high reward.
I'm personally focusing on Bitcoin (BTC) and Ethereum (ETH), though I've bought a tiny amount of Bitcoin Cash (BCH), Litecoin (LTC), and Ethereum Classic (ETC) as well. What I plan to do is basically "dollar cost average," where I plan to buy a little at a time every week whether the prices go up or down until I hit the max amount that I'm willing to invest in cryptos. No one really knows whether now is a good time to buy. The prices could still go way down in the near future or go way way up and you could miss out. So averaging your cost seems a sound strategy to me.
One important thing to keep in mind is that Robinhood currently doesn't let you withdraw your coins, which could be a big drawback to some people. But according to their FAQ, they do have plans to support coin withdrawals in the future. Also, cryptocurrencies are not insured in Robinhood, unlike regular stocks.
If you don't already have a Robinhood account, I encourage you to at least check it out. Even if you don't have plans to buy cryptos and only interested in buying regular stocks, I feel Robinhood is a much better alternative than the other brokerages out there for the nicer UI and zero fees alone.
If you do sign up for a Robinhood account, you can use my referral link to get a free stock. :)