You can buy and hold Dogecoin on Robinhood. You also can day trade or swing trade cryptocurrency on your Robinhood account. However, there are several things you need to know.
- You can only buy or sell Dogecoin.
- Robinhood will not give you access to your Dogecoin wallet.
- Robinhood will not allow you to transfer your Dogecoin to another wallet.
- You can’t send or receive Dogecoin on Robinhood.
If you trade shares in the Robinhood, they allow you to move your stocks to another stockbroker. For example, suppose you hold 100 TSLA shares in Robinhood, but you are not satisfied with their service. So, you decide to open a trading account with Interactive Brokers (IB).
Now, you don’t need to sell your TSLA shares to move your money or shares to IB. Instead, you can ask Robinhood to transfer everything from your account to your IB account. It’s like sending money through an ACH transaction. When you move your stocks from Robinhood to another broker, you don’t pay any taxes.
On the other hand, if you buy Dogecoin 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 Dogecoin and transfer your money to your bank account. It creates another problem. If you sell your Dogecoin at a profit, you have to pay a capital gain tax to the IRS during tax season.
Dogecoin is a digital currency. As Robinhood does not give your wallet address or access, you can’t spend it online or pay others with your Robinhood Dogecoin.
However, it is entirely safe to buy Dogecoin on Robinhood. Robinhood is the most popular apps to trade stocks, options, and cryptos. They will not do anything that tarnishes their reputation. Therefore, it’s safe to buy Dogecoin and hold it into your Robinhood account.
Remember that though 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 their 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 Dogecoin 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.
Nonetheless, Don’t panic. This type of occurrence is improbable. Hence, you can trade Dogecoin with your Robinhood app without any worry.
For a long-term investment strategy, however, or if you want to invest in other cryptos other than Dogecoin, Robinhood is not the best platform. It’s better to use Coinbase or Binance.
Yet, the best thing is,
- Download the Dogecoin Core or MultiDose (Dogecoin Light Wallet) from the official https://dogecoin.com/ website.
- Setup a Dogecoin wallet.
- Buy Dogecoin from a crypto exchange or others and ask them to send Doge to your wallet.
Here is an official Dogecoin starter guide: https://dogecoin.com/getting-started/#windows-desktop-os
If you have an option, please don’t keep your coins with a crypto exchange or on your online wallet. The crypto market is unregulated and harmful things happen all the time. Your Dogecoin is safe if you keep it at your disposal.