Binance Coin (BNB) is the native cryptocurrency of the Binance crypto exchange. It runs on the Ethereum blockchain with ERC20 standard.
You can’t buy, sell, trade, or transfer Binance Coin (BNB) on Robinhood. BNB trades exclusively on the Binance exchange. Robinhood supports only 7 cryptocurrencies; Binance Coin (BNB) is not one of them. These supported cryptos are:
- Dogecoin (DOGE),
- Litecoin (LTC),
- Ethereum Classic (ETC),
- Ethereum (ETH),
- Bitcoin SV (BSV),
- Bitcoin Cash (BCH),
- Bitcoin (BTC).
Even if you could buy Binance Coin (BNB) on Robinhood, you should not do it on this platform. There are multiple reasons; here are a few discussed below.
Robinhood has two subsidiaries.
- Robinhood Financial LLC.
- Robinhood Crypto LLC.
The Robinhood Financial LLC. is a SIPC and FINRA member. All the stocks, options, and ETFs trading are done through this company. Moreover, all of your stock investment (up to $500,000) is insured by either FDIC or SIPC. Therefore, even if Robinhood Financial LLC. goes bankrupt, your money is secured.
On the other hand, Robinhood Crypto LLC. is NOT a SIPC or FINRA member, and your money is not FDIC or SIPC insured. Therefore, if significant hacks occur at Robinhood Crypto LLC, you would lose all of your money. You have no protections.
Robinhood Crypto claims that you can buy and sell cryptocurrencies commission-free. But, if Robinhood Crypto is not charging you a commission, then how are they generating revenue? They are not a charity organization. If something is free, then you are the product.
Robinhood Crypto front runs your crypto trades. They don’t give you the best market price.
For example, you want to buy 1 Bitcoin at Robinhood. If you place a limit buy order at $50,000, Robinhood will not give you the best market offer. Robinhood will charge you $50,000 for 1 Bitcoin, but in reality, Robinhood bought the Bitcoin from the open market at $49,800 and sold it to you at $50,000.
In case of a limit sell order, if you place an order to sell your 1 Bitcoin at $50,000, Robinhood would not execute your order until the price goes beyond a specific price, for example, $50,200. Then, Robinhood would buy your 1 Bitcoin at $50,000. Then they would sell it in the market for $50,200. They would take this extra profit instead of giving it to you. In reality, Robinhood is doing business with your money.
It’s why you would see that even though the price falls below your limit buy or rises above your limit sell price, your order is not executed. Robinhood waits to front run your order to profit off of your trades. However, Robinhood hides all these facts from customers.
Robinhood also doesn’t allow you to withdraw or transfer your coin to another wallet or into your Robinhood wallet. They don’t give you any access to your cryptos. Thus, the only way to move your cryptos to an external wallet is by selling your coin for USD and cash out. But, if you do it, your crypto profits will incur capital income tax from the IRS.
Cryptocurrencies are digital money. If you can’t use your crypto, what’s the point? It’s like having a bank account, but you can’t spend your money from your account. On the contrary, you can buy, sell, and transfer your coins without any problems in other online crypto-wallets.
There’s a significant difference between a stock and cryptos. When you buy a share, you are effectively purchasing a fraction of ownership of that company. On the contrary, cryptos are currencies that are meant to be used. For example, if you are visiting Europe, you will convert your national currency to Euro. Euro is not a share; it’s a currency. Similarly, Cryptos are currency.
When you buy cryptos on Robinhood, they will not allow you to transfer, withdraw, send, or spend it anywhere. They would not even give you access to your crypto wallet. It’s absurd.
It’s ridiculous because Robinhood allows you to transfer your stocks from other brokerages to Robinhood or from Robinhood to other brokerages. However, they lock your cryptocurrencies.
Alternatives to Robinhood to purchase Binance Coin (BNB):
The only place from where you can purchase Binance Coin is Binance exchange. You can’t buy BNB from anywhere else.