Can You Day Trade Crypto On Robinhood
In this quick guide, we'll break down how one can start day trading on the Robinhood platform and just how much startup capital is needed to begin day trading on the platform as a day job. A portfolio value of at least $25,000 must be in margin accounts as well as for PDT accounts. The value of a portfolio is the sum of your assets, options, and stocks (cryptocurrencies are an exception). We'll also explore exactly what Robinhood is, whether day trading is even possible, if crypto is lucrative to trade on the platform, and the pros and cons of doing so. We'll also break down what types of crypto and altcoins one can trade on the platform, the fees that Robinhood charges, whether or not one can withdraw crypto from their Robinhood account, and the best alternative to Robinhood Crypto. Let's start by explaining exactly what Robinhood is.
What is Robinhood Crypto?
Robinhood is an online exchange, broker, and investment organization that provides various services for the stock market and other markets as well. The platform was designed to make investing more accessible to younger and inexperienced investors who wanted to get started with investing in a convenient, inexpensive way. The platform is known for having an excellent mobile application, the ability to adequately visualize your diversified portfolio, and the ability to access useful news in the world of crypto and stocks.
On the Robinhood platform, there are many different forms of trading instruments available, such as stocks, ETFs, commodities, options (limited to only some users), and cryptocurrency. Robinhood Crypto is compliant and regulated by the Financial Industry Regulatory Authority (FINRA). As of January 2023, Robinhood is currently only available in the United States for U.S. residents. The platform also offers standard and Robinhood Gold accounts that could benefit day traders or high-volume traders.
Can You Day Trade Crypto on Robinhood?
Technically, yes. You can day trade crypto on Robinhood 24 hours a day, 7 days a week. Market orders are collared up to 1% for purchases and 5% for sells. Collars are usually based on the last known trade cost. If the price of a coin moves more than 5% under its price at the time one places a market sell order, then the order won’t be executed. This is the same for when coins go 1% higher than their price when a market buy order is placed. Orders must be executed in five minutes or they will be automatically canceled. There are no day trading limits on crypto, because they are technically not regulated the same way that stocks and options are.
Can you day trade crypto on Robinhood without $25k?
For other forms of trading, a $25,000 portfolio value must be maintained in order to be compliant with FINRA regulations. As a result, many brokerages enforce this rule. However, crypto is technically not regulated by FINRA. One can absolutely day trade with less than $25,000 in their portfolio to start or in the long term when it comes to cryptocurrency. Day traders can make more than five daily trades per week with less than $25,000 – and since the market never closes for crypto on Robinhood, you can do a lot with a little bit of capital to start as a day trader of crypto.
Robinhood Crypto Day Trading Pros and Cons
There are many advantages to day trading on Robinhood with crypto, including the following:
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Any person with access to Robinhood can freely trade cryptocurrency. Outside of verification of your identity and funding your account, there are no additional rules to start day trading on the crypto market.
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Robinhood allows the buying and selling of whole coins as well as fractional purchases based on fiat currency.
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Crypto markets are open 24/7 all year round, so you can choose to day trade at any time you wish.
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Because crypto is on a decentralized blockchain, there is no intermediary there to charge fees or manage your money. Because of these, taxes and fees associated with day trading are very low.
However, there are some disadvantages as well. These include:
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Crypto is volatile and risky. With so few limits on day trading, inexperienced novice traders could incur incredible losses quite quickly.
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The always-open crypto market might be convenient, but it can also lead to traders obsessively trading with little sleep or outside activities. It can also result in fewer patterns throughout the day that are predictable.
How to Day Trade Crypto on Robinhood?
Day trading is not too difficult to start doing on Robinhood, especially with crypto.
Follow these steps:
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1
Open your account. You will need to verify your identity and should have your ID card or passport handy. We recommend signing up via the mobile app, since you’ll need to take some photos.
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2
Fund your account once you are verified. This is very easy and can be done via the Settings section under Deposits and Withdrawals.
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3
Choose your asset of choice. Robinhood only has a few coins available, but they are the most popular coins on the market.
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4
Research your asset and study the market constantly. This is a big part of being a day trader. You should have a strategy in place when you begin day trading, such as buying red and selling green, etc.
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5
Purchase your asset of choice.
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6
Monitor the market all day and execute a sell when the time is right. We recommend using signals or copy trading to make this experience easier. Do not risk a massive percentage of your capital into crypto as a beginner day trader.
What Crypto Can You Day Trade on Robinhood
Compared to platforms like Webull and Coinbase, Robinhood does not have a massive selection of cryptocurrency available. You won’t find many altcoins on this platform. However, if you only plan on day trading the major players in crypto, then this won’t be much of an issue.
| Trading pair | Industry | Current price | |
|---|---|---|---|
BTCUSD |
Payments |
$60,466.19 |
|
ETHUSD |
Blockchain platform |
$4,304.27 |
|
DOGEUSD |
Payments, Meme coin |
$0.240491 |
|
Bitcoin Cash |
BCHUSD |
Payments |
$607.40 |
Bitcoin SV |
BSVUSD |
Payments |
$162.14 |
LTCUSD |
Payments |
$235.48 |
|
Ethereum Classic |
ETCUSD |
Blockchain platform |
$51.34 |
Open your account. You will need to verify your identity and should have your ID card or passport handy. We recommend signing up via the mobile app, since you’ll need to take some photos.
Fund your account once you are verified. This is very easy and can be done via the Settings section under Deposits and Withdrawals.
Choose your asset of choice. Robinhood only has a few coins available, but they are the most popular coins on the market.
Research your asset and study the market constantly. This is a big part of being a day trader. You should have a strategy in place when you begin day trading, such as buying red and selling green, etc.
Purchase your asset of choice.
Monitor the market all day and execute a sell when the time is right. We recommend using signals or copy trading to make this experience easier. Do not risk a massive percentage of your capital into crypto as a beginner day trader.
Robinhood Crypto Fees
One of the biggest reasons Robinhood is so popular as a crypto exchange is because it does not charge a lot in terms of fees. There are no commission fees required to trade cryptocurrency, and the prices for crypto are completely reliant on the ebb and flow of the market. Robinhood makes a majority of its money from market makers as well as frequency trading firms that pay for the overall order floor from retail traders. Robinhood also earns money from margin loans and securities.
Robinhood VS Webull Crypto Fees
Both Webull and Robinhood are great for cryptocurrency day trading. However, we’d recommend Robinhood due to its superior mobile app and ease of use.
| Robinhood | Webull | |
|---|---|---|
Crypto fees |
$0 |
$0 |
Can I Withdraw Crypto From My Robinhood Account?
Unfortunately, Robinhood does not make it possible to withdraw crypto directly from one’s account. This is the major downside of the exchange platform for day traders. However, Robinhood recently announced that they will be debuting a crypto wallet that will make withdrawals possible. Expect the wallet feature to be released sometime in 2023.
What Are the Best Robinhood Crypto Alternatives?
If Robinhood doesn’t suit you, you have a ton of alternatives available.
Summary
Robinhood is a great place to trade crypto, especially as a beginner with little experience. However, when it comes to day trading, newbies will still need to do extensive research, invest in signals, and learn as much as they can to avoid losing money. Because crypto day trading is available on Robinhood 24/7, there is as much opportunity for risk as there is for profit. Regardless, Robinhood is a decent place to start day trading crypto.
FAQs
Can you day trade without 25000?
If there is less than $25,000 in the account, the client will not be able to conduct intraday trading until cash or securities are deposited into the account.
What happens if I day trade with less than 25000?
If there is less than $25,000 left in the account, traders will only be able to make liquidation trades the next day.
Is there a limit to day trading crypto?
There are no intraday trading limits for cryptocurrencies.
Do you need a minimum to day trade crypto?
Regulators (such as FINRA and SEC) require PDT accounts to have a purchasing power of at least $25,000.
Is Robinhood available outside of the US?
Unfortunately, only U.S. residents can day trade crypto on Robinhood. There is no word from the company as of 2024 that they plan to expand to international markets.
Can I have more than one account for day trading crypto on Robinhood?
Unfortunately, you can only have one account per person. However, you can day trade multiple cryptocurrencies on the platform, so there really is no need for a second Robinhood account for day trading.
Is opening a Robinhood account easy?
Yes! All you need to open an account is a smartphone, the Robinhood app, your ID or passport, and a bit of patience for the verification process to end.
How many cryptocurrencies does Robinhood offer?
As of 2024, Robinhood only offers seven different coins.
Team that worked on the article
Ivan is a financial expert and analyst specializing in Forex, crypto, and stock trading. He prefers conservative trading strategies with low and medium risks, as well as medium-term and long-term investments. He has been working with financial markets for 8 years. Ivan prepares text materials for novice traders. He specializes in reviews and assessment of brokers, analyzing their reliability, trading conditions, and features.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.
Olga has extensive experience in writing and editing articles about the specifics of working in the Forex market, cryptocurrency market, stock exchanges and also in the segment of financial investment in general. This level of expertise allows Olga to create unique and comprehensive articles, describing complex investment mechanisms in a simple and accessible way for traders of any level.
Olga’s motto: Do well and you’ll be well!