SHIBA INU (aka SHIB) crypto is not on the Robinhood platform. Moreover, during a recent shareholder meeting, Robinhood CEO Vladimir Tenev made it clear that they will not add SHIB to the Robinhood app anytime soon.
However, you don’t need the Robinhood app to buy SHIB crypto tokens. There are various other alternatives. The best alternative platform to buy SHIB is Coinbase.
Even if Robinhood adds SHIB to its platform, you should not use the Robinhood app to trade it. There are several reasons for us to discourage it, as we discussed below.
Robinhood claims every trade is free on its platform. However, there’s no free lunch. If a product is free, then you are the product. Facebook, Google, and Instagram are free. In these platforms, our usage and personal data are their targets. They sell our data to advertisers. It’s modern-day oil.
In Robinhood, they make money off of the user in several ways.
First, they front-run your trade. The process here is straightforward but deceitful. Here’s an example. Suppose TSLA is trading at $1050. If you place a market order, you will not get the best price. In this case, Robinhood would buy the TSLA share from the market (at $1048) and will sell it to you at a profit (at $1051). If you order 100 shares, you already lost or gave $300 to Robinhood.
In the case of crypto, it’s more deceitful.
The Crypto market is entirely unregulated. Therefore, Robinhood can front-run your crypto trade without any legal consequences, and they do. Even though you are not directly paying any fees, indirectly, you are losing a lot of money during the crypto trade on Robinhood.
Moreover, Robinhood does not give access to its users to their crypto wallets. Therefore, you don’t have any access to your crypto. You can’t use it, transfer it, access it, send it, or receive it from another crypto exchange. It is in complete lockdown on the Robinhood platform. Your only recourse is to sell it.
If you trade shares in the Robinhood, they allow you to move your stocks to another stockbroker. For example, suppose you hold 100 AAPL shares in Robinhood, but you are not satisfied with their service. So, you decide to open a trading account with TDAmeritrade.
Now, you don’t need to sell your AAPL shares to move your money or shares to TDAmeritrade. Instead, you can ask Robinhood to transfer everything from your account to your TDAmeritrade account. It’s like sending money through an ACH transaction. When you move your stocks from Robinhood to another broker, you don’t pay taxes except for a small transfer fee.
On the other hand, if you buy Bitcoin with Robinhood, they will not allow you to transfer your crypto to any other crypto wallet. Your only option is to sell all of your Bitcoin and transfer your money to your bank account. It creates another problem. If you sell your Bitcoin at a profit, you have to pay a capital gain tax to the IRS during tax season.
So, we repeat – Robinhood claims crypto trading on its platform is commission-free; in reality, it’s not. If a product is free, then you are the product.
Robinhood has two individual companies. These are:
- Robinhood Financial, LLC.
- Robinhood Crypto, LLC.
Robinhood trades all its stocks and options through Robinhood Financial LLC. This company is a member of FINRA/SIPC, and all of your investment is insured, up to $500,000. Therefore, if Robinhood for any reason goes bankrupt, you would get back up to $500,000 from that insurance.
However, when you trade Bitcoin on Robinhood, these trades are executed under Robinhood Crypto, LLC. Robinhood keeps all of your cryptos in this company. Robinhood Crypto is not a FINRA/SIPC member, and your crypto investment is not insured.
Therefore, if Robinhood suffers major hack or major server failures and fails to restore its servers properly, you may lose all of your Crypto investment.
In conclusion, We can’t buy SHIB crypto on the Robinhood app. But even we could; we should not.