Robinhood, to the crypto rescue — Daily Uncrypt Digest — 1/26/18

Coinbase, by all rights the leading cryptocurrency exchange, has an intriguing new competitor to tangle with.

Yesterday, commission-free stock trading app Robinhood announced that it will soon allow users to trade Bitcoin and Ethereum. It won’t hit all 50 US states, so adoption may take some time, but this is undeniably a shot across Coinbase’s bow.

Coinbase has heard it all — fees are too high, transactions take too long, there is price arbitrage that expert traders can exploit, the company is playing favorites…the list goes on and on. Though not every insult hurled on Twitter should be treated as gospel, Coinbase and its motivational-Tweeter CEO Brian Armstrong would be foolish not to recognize the threat of a company like Robinhood.

Robinhood offers the best counter yet to Coinbase’s biggest advantage — its user-friendly experience — while offering things that Coinbase either can’t or won’t. With no fees associated with buying crypto on Robinhood, users will certainly kick the tires, if not switch entirely. We’re looking at a full-on race to the bottom with fees, which is great for users but bad for Coinbase.

Perhaps even more exciting is the prospect of trading stocks for crypto and vice versa on Robinhood. It’s not hard to see savvy personal financiers salivating over the idea of flipping some of their portfolio into higher-potential crypto assets. I’m obviously not sitting in on Coinbase staff meetings, but it would shock this crypto blogger if the company had plans to match Robinhood feature for feature with stocks.

1. To the surprise of no one, Davos talking heads are trashing crypto — (CNBC)
2. Key Bitcoiner doubts exchanges will adopt Lightning Network — (Bitcoinist)
3. Japanese exchange Coincheck hacked — (CoinTelegraph)
4. Only the brave dare use Lightning Network at this early stage — (CoinDesk)